Correlation Between State Grid and Air China
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By analyzing existing cross correlation between State Grid InformationCommunication and Air China Ltd, you can compare the effects of market volatilities on State Grid and Air China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in State Grid with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Air China.
Diversification Opportunities for State Grid and Air China
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Air is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and State Grid is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on State Grid InformationCommunication are associated (or correlated) with Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China has no effect on the direction of State Grid i.e., State Grid and Air China go up and down completely randomly.
Pair Corralation between State Grid and Air China
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to under-perform the Air China. But the stock apears to be less risky and, when comparing its historical volatility, State Grid InformationCommunication is 1.11 times less risky than Air China. The stock trades about -0.46 of its potential returns per unit of risk. The Air China Ltd is currently generating about -0.39 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Air China Ltd on October 14, 2024 and sell it today you would lose (118.00) from holding Air China Ltd or give up 13.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. Air China Ltd
Performance |
| Timeline |
| State Grid Informati |
| Air China |
State Grid and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and Air China
The main advantage of trading using opposite State Grid and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Air China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air China will offset losses from the drop in Air China's long position.| State Grid vs. Dymatic Chemicals | State Grid vs. Shanghai Shibei Hi Tech | State Grid vs. FSPG Hi Tech Co | State Grid vs. Guangzhou Jointas Chemical |
| Air China vs. State Grid InformationCommunication | Air China vs. Strait Innovation Internet | Air China vs. Sichuan Jinshi Technology | Air China vs. Beijing Enlight Media |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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