Correlation Between Air China and Guangdong Silvere
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By analyzing existing cross correlation between Air China Ltd and Guangdong Silvere Sci, you can compare the effects of market volatilities on Air China and Guangdong Silvere 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 Guangdong Silvere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Guangdong Silvere.
Diversification Opportunities for Air China and Guangdong Silvere
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Guangdong is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Guangdong Silvere Sci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Silvere Sci 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 Guangdong Silvere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Silvere Sci has no effect on the direction of Air China i.e., Air China and Guangdong Silvere go up and down completely randomly.
Pair Corralation between Air China and Guangdong Silvere
Assuming the 90 days trading horizon Air China is expected to generate 3.08 times less return on investment than Guangdong Silvere. But when comparing it to its historical volatility, Air China Ltd is 2.23 times less risky than Guangdong Silvere. It trades about 0.02 of its potential returns per unit of risk. Guangdong Silvere Sci is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 604.00 in Guangdong Silvere Sci on September 14, 2024 and sell it today you would earn a total of 81.00 from holding Guangdong Silvere Sci or generate 13.41% 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. Guangdong Silvere Sci
Performance |
| Timeline |
| Air China |
| Guangdong Silvere Sci |
Air China and Guangdong Silvere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Guangdong Silvere
The main advantage of trading using opposite Air China and Guangdong Silvere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Guangdong Silvere 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 Guangdong Silvere will offset losses from the drop in Guangdong Silvere'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 |
| Guangdong Silvere vs. Jiugui Liquor Co | Guangdong Silvere vs. Air China Ltd | Guangdong Silvere vs. Anhui Huaren Health | Guangdong Silvere vs. Shandong Sinoglory Health |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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