Correlation Between Wuhan Yangtze and Air China
Specify exactly 2 symbols:
By analyzing existing cross correlation between Wuhan Yangtze Communication and Air China Ltd, you can compare the effects of market volatilities on Wuhan Yangtze 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 Wuhan Yangtze with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Air China.
Diversification Opportunities for Wuhan Yangtze and Air China
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wuhan and Air is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Wuhan Yangtze 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 Wuhan Yangtze Communication 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 Wuhan Yangtze i.e., Wuhan Yangtze and Air China go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Air China
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 2.08 times more return on investment than Air China. However, Wuhan Yangtze is 2.08 times more volatile than Air China Ltd. It trades about 0.27 of its potential returns per unit of risk. Air China Ltd is currently generating about 0.16 per unit of risk. If you would invest 1,511 in Wuhan Yangtze Communication on September 2, 2024 and sell it today you would earn a total of 1,458 from holding Wuhan Yangtze Communication or generate 96.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Air China Ltd
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Air China |
Wuhan Yangtze and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Air China
The main advantage of trading using opposite Wuhan Yangtze and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze 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.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Mobile Limited |
| Air China vs. China Life Insurance | Air China vs. Cinda Securities Co | Air China vs. Piotech Inc A | Air China vs. Dongxing Sec Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |