Correlation Between Air China and Sportsoul
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By analyzing existing cross correlation between Air China Ltd and Sportsoul Co Ltd, you can compare the effects of market volatilities on Air China and Sportsoul 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 Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Sportsoul.
Diversification Opportunities for Air China and Sportsoul
Poor diversification
The 3 months correlation between Air and Sportsoul is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul 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 Sportsoul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsoul has no effect on the direction of Air China i.e., Air China and Sportsoul go up and down completely randomly.
Pair Corralation between Air China and Sportsoul
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Sportsoul. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.31 times less risky than Sportsoul. The stock trades about -0.07 of its potential returns per unit of risk. The Sportsoul Co Ltd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,136 in Sportsoul Co Ltd on November 3, 2024 and sell it today you would earn a total of 19.00 from holding Sportsoul Co Ltd or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Sportsoul Co Ltd
Performance |
| Timeline |
| Air China |
| Sportsoul |
Air China and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Sportsoul
The main advantage of trading using opposite Air China and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Sportsoul 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 Sportsoul will offset losses from the drop in Sportsoul's long position.| Air China vs. Zhongrun Resources Investment | Air China vs. Anji Foodstuff Co | Air China vs. Hunan Investment Group | Air China vs. V V Food |
| Sportsoul vs. Jinhe Biotechnology Co | Sportsoul vs. Sharetronic Data Technology | Sportsoul vs. V V Food | Sportsoul vs. Holitech Technology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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