Correlation Between Air China and Xinjiang Communications
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By analyzing existing cross correlation between Air China Ltd and Xinjiang Communications Construction, you can compare the effects of market volatilities on Air China and Xinjiang Communications 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 Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Xinjiang Communications.
Diversification Opportunities for Air China and Xinjiang Communications
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Xinjiang is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Communications 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 Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Air China i.e., Air China and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Air China and Xinjiang Communications
Assuming the 90 days trading horizon Air China Ltd is expected to generate 0.59 times more return on investment than Xinjiang Communications. However, Air China Ltd is 1.69 times less risky than Xinjiang Communications. It trades about 0.02 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.0 per unit of risk. If you would invest 788.00 in Air China Ltd on August 31, 2024 and sell it today you would earn a total of 48.00 from holding Air China Ltd or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Xinjiang Communications Constr
Performance |
| Timeline |
| Air China |
| Xinjiang Communications |
Air China and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Xinjiang Communications
The main advantage of trading using opposite Air China and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Xinjiang Communications 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.| Air China vs. Cultural Investment Holdings | Air China vs. Gome Telecom Equipment | Air China vs. Bus Online Co | Air China vs. Holitech Technology Co |
| Xinjiang Communications vs. Cultural Investment Holdings | Xinjiang Communications vs. Gome Telecom Equipment | Xinjiang Communications vs. Bus Online Co | Xinjiang Communications 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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