Correlation Between Liuzhou Chemical and Air China
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By analyzing existing cross correlation between Liuzhou Chemical Industry and Air China Ltd, you can compare the effects of market volatilities on Liuzhou Chemical 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 Liuzhou Chemical with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liuzhou Chemical and Air China.
Diversification Opportunities for Liuzhou Chemical and Air China
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Liuzhou and Air is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Liuzhou Chemical Industry and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Liuzhou Chemical 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 Liuzhou Chemical Industry 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 Liuzhou Chemical i.e., Liuzhou Chemical and Air China go up and down completely randomly.
Pair Corralation between Liuzhou Chemical and Air China
Assuming the 90 days trading horizon Liuzhou Chemical Industry is expected to generate 1.61 times more return on investment than Air China. However, Liuzhou Chemical is 1.61 times more volatile than Air China Ltd. It trades about -0.22 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.44 per unit of risk. If you would invest 324.00 in Liuzhou Chemical Industry on October 11, 2024 and sell it today you would lose (44.00) from holding Liuzhou Chemical Industry or give up 13.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Liuzhou Chemical Industry vs. Air China Ltd
Performance |
| Timeline |
| Liuzhou Chemical Industry |
| Air China |
Liuzhou Chemical and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liuzhou Chemical and Air China
The main advantage of trading using opposite Liuzhou Chemical and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liuzhou Chemical 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.| Liuzhou Chemical vs. AUPU Home Style | Liuzhou Chemical vs. Oppein Home Group | Liuzhou Chemical vs. Easyhome New Retail | Liuzhou Chemical vs. Ziel Home Furnishing |
| Air China vs. CIMC Vehicles Co | Air China vs. Jinxiandai Information Industry | Air China vs. Longmaster Information Tech | Air China vs. Jiangsu Xinri E Vehicle |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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