Correlation Between Air China and China Reform
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By analyzing existing cross correlation between Air China Ltd and China Reform Health, you can compare the effects of market volatilities on Air China and China Reform 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 Air China with a short position of China Reform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and China Reform.
Diversification Opportunities for Air China and China Reform
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and China is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and China Reform Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reform Health and Air China 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 Air China Ltd are associated (or correlated) with China Reform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reform Health has no effect on the direction of Air China i.e., Air China and China Reform go up and down completely randomly.
Pair Corralation between Air China and China Reform
Assuming the 90 days trading horizon Air China Ltd is expected to generate 0.77 times more return on investment than China Reform. However, Air China Ltd is 1.3 times less risky than China Reform. It trades about -0.41 of its potential returns per unit of risk. China Reform Health is currently generating about -0.47 per unit of risk. If you would invest 889.00 in Air China Ltd on October 11, 2024 and sell it today you would lose (131.00) from holding Air China Ltd or give up 14.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. China Reform Health
Performance |
| Timeline |
| Air China |
| China Reform Health |
Air China and China Reform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and China Reform
The main advantage of trading using opposite Air China and China Reform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, China Reform 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 China Reform will offset losses from the drop in China Reform's long position.| 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 |
| China Reform vs. Iat Automobile Technology | China Reform vs. Cultural Investment Holdings | China Reform vs. Air China Ltd | China Reform vs. Shanghai Material Trading |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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