Correlation Between Air China and Muyuan Foodstuff
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By analyzing existing cross correlation between Air China Ltd and Muyuan Foodstuff Co, you can compare the effects of market volatilities on Air China and Muyuan Foodstuff 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 Muyuan Foodstuff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Muyuan Foodstuff.
Diversification Opportunities for Air China and Muyuan Foodstuff
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Muyuan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Muyuan Foodstuff Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muyuan Foodstuff 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 Muyuan Foodstuff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muyuan Foodstuff has no effect on the direction of Air China i.e., Air China and Muyuan Foodstuff go up and down completely randomly.
Pair Corralation between Air China and Muyuan Foodstuff
Assuming the 90 days trading horizon Air China Ltd is expected to generate 1.53 times more return on investment than Muyuan Foodstuff. However, Air China is 1.53 times more volatile than Muyuan Foodstuff Co. It trades about 0.34 of its potential returns per unit of risk. Muyuan Foodstuff Co is currently generating about -0.22 per unit of risk. If you would invest 740.00 in Air China Ltd on September 15, 2024 and sell it today you would earn a total of 121.00 from holding Air China Ltd or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Muyuan Foodstuff Co
Performance |
| Timeline |
| Air China |
| Muyuan Foodstuff |
Air China and Muyuan Foodstuff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Muyuan Foodstuff
The main advantage of trading using opposite Air China and Muyuan Foodstuff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Muyuan Foodstuff 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 Muyuan Foodstuff will offset losses from the drop in Muyuan Foodstuff's long position.| Air China vs. China State Construction | Air China vs. Poly Real Estate | Air China vs. China Vanke Co | Air China vs. China Merchants Shekou |
| Muyuan Foodstuff vs. Jiangsu GDK Biotechnology | Muyuan Foodstuff vs. Air China Ltd | Muyuan Foodstuff vs. Yindu Kitchen Equipment | Muyuan Foodstuff vs. MayAir 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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