Correlation Between Air China and Ingenic Semiconductor
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By analyzing existing cross correlation between Air China Ltd and Ingenic Semiconductor, you can compare the effects of market volatilities on Air China and Ingenic Semiconductor 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 Ingenic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Ingenic Semiconductor.
Diversification Opportunities for Air China and Ingenic Semiconductor
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Ingenic is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Ingenic Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingenic Semiconductor 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 Ingenic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingenic Semiconductor has no effect on the direction of Air China i.e., Air China and Ingenic Semiconductor go up and down completely randomly.
Pair Corralation between Air China and Ingenic Semiconductor
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Ingenic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.86 times less risky than Ingenic Semiconductor. The stock trades about -0.03 of its potential returns per unit of risk. The Ingenic Semiconductor is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,321 in Ingenic Semiconductor on November 7, 2024 and sell it today you would lose (1,881) from holding Ingenic Semiconductor or give up 22.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Ingenic Semiconductor
Performance |
| Timeline |
| Air China |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ingenic Semiconductor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air China and Ingenic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Ingenic Semiconductor
The main advantage of trading using opposite Air China and Ingenic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Ingenic Semiconductor 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 Ingenic Semiconductor will offset losses from the drop in Ingenic Semiconductor's long position.The idea behind Air China Ltd and Ingenic Semiconductor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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