Correlation Between Air China and LianChuang Electronic
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By analyzing existing cross correlation between Air China Ltd and LianChuang Electronic Technology, you can compare the effects of market volatilities on Air China and LianChuang Electronic 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 LianChuang Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and LianChuang Electronic.
Diversification Opportunities for Air China and LianChuang Electronic
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and LianChuang is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and LianChuang Electronic Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianChuang Electronic 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 LianChuang Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianChuang Electronic has no effect on the direction of Air China i.e., Air China and LianChuang Electronic go up and down completely randomly.
Pair Corralation between Air China and LianChuang Electronic
Assuming the 90 days trading horizon Air China is expected to generate 10.85 times less return on investment than LianChuang Electronic. But when comparing it to its historical volatility, Air China Ltd is 1.99 times less risky than LianChuang Electronic. It trades about 0.02 of its potential returns per unit of risk. LianChuang Electronic Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 636.00 in LianChuang Electronic Technology on November 3, 2024 and sell it today you would earn a total of 248.00 from holding LianChuang Electronic Technology or generate 38.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. LianChuang Electronic Technolo
Performance |
| Timeline |
| Air China |
| LianChuang Electronic |
Air China and LianChuang Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and LianChuang Electronic
The main advantage of trading using opposite Air China and LianChuang Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, LianChuang Electronic 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 LianChuang Electronic will offset losses from the drop in LianChuang Electronic's long position.| Air China vs. Heilongjiang Publishing Media | Air China vs. Shuhua Sports Co | Air China vs. Mango Excellent Media | Air China vs. Hubei Forbon Technology |
| LianChuang Electronic vs. Touchstone International Medical | LianChuang Electronic vs. Guosheng Financial Holding | LianChuang Electronic vs. Xiangyu Medical Co | LianChuang Electronic vs. Postal Savings Bank |
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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