Correlation Between Air China and Shenzhen Kexin
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By analyzing existing cross correlation between Air China Ltd and Shenzhen Kexin Communication, you can compare the effects of market volatilities on Air China and Shenzhen Kexin 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 Shenzhen Kexin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Shenzhen Kexin.
Diversification Opportunities for Air China and Shenzhen Kexin
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Shenzhen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Shenzhen Kexin Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Kexin Commu 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 Shenzhen Kexin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Kexin Commu has no effect on the direction of Air China i.e., Air China and Shenzhen Kexin go up and down completely randomly.
Pair Corralation between Air China and Shenzhen Kexin
Assuming the 90 days trading horizon Air China is expected to generate 1.17 times less return on investment than Shenzhen Kexin. But when comparing it to its historical volatility, Air China Ltd is 1.81 times less risky than Shenzhen Kexin. It trades about 0.23 of its potential returns per unit of risk. Shenzhen Kexin Communication is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,056 in Shenzhen Kexin Communication on September 12, 2024 and sell it today you would earn a total of 399.00 from holding Shenzhen Kexin Communication or generate 37.78% 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. Shenzhen Kexin Communication
Performance |
| Timeline |
| Air China |
| Shenzhen Kexin Commu |
Air China and Shenzhen Kexin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Shenzhen Kexin
The main advantage of trading using opposite Air China and Shenzhen Kexin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Shenzhen Kexin 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 Shenzhen Kexin will offset losses from the drop in Shenzhen Kexin's long position.| Air China vs. Shanghai Action Education | Air China vs. Heilongjiang Publishing Media | Air China vs. Qtone Education Group | Air China vs. Southern PublishingMedia Co |
| Shenzhen Kexin vs. Industrial and Commercial | Shenzhen Kexin vs. China Construction Bank | Shenzhen Kexin vs. Bank of China | Shenzhen Kexin vs. Agricultural Bank of |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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