Correlation Between AECC Aviation and Chengdu Kanghua
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By analyzing existing cross correlation between AECC Aviation Power and Chengdu Kanghua Biological, you can compare the effects of market volatilities on AECC Aviation and Chengdu Kanghua 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 AECC Aviation with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECC Aviation and Chengdu Kanghua.
Diversification Opportunities for AECC Aviation and Chengdu Kanghua
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AECC and Chengdu is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AECC Aviation Power and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and AECC Aviation 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 AECC Aviation Power are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of AECC Aviation i.e., AECC Aviation and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between AECC Aviation and Chengdu Kanghua
Assuming the 90 days trading horizon AECC Aviation Power is expected to generate 0.88 times more return on investment than Chengdu Kanghua. However, AECC Aviation Power is 1.14 times less risky than Chengdu Kanghua. It trades about -0.11 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about -0.31 per unit of risk. If you would invest 3,975 in AECC Aviation Power on October 25, 2024 and sell it today you would lose (172.00) from holding AECC Aviation Power or give up 4.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
AECC Aviation Power vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| AECC Aviation Power |
| Chengdu Kanghua Biol |
AECC Aviation and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECC Aviation and Chengdu Kanghua
The main advantage of trading using opposite AECC Aviation and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECC Aviation position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| AECC Aviation vs. Zhongzhu Medical Holdings | AECC Aviation vs. Allgens Medical Technology | AECC Aviation vs. Shanghai CEO Environmental | AECC Aviation vs. Touchstone International Medical |
| Chengdu Kanghua vs. Tongding Interconnection Information | Chengdu Kanghua vs. Invengo Information Technology | Chengdu Kanghua vs. Spring Airlines Co | Chengdu Kanghua vs. Hygon Information Technology |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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