Correlation Between Air China and Kangping Technology
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By analyzing existing cross correlation between Air China Ltd and Kangping Technology Co, you can compare the effects of market volatilities on Air China and Kangping Technology 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 Kangping Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Kangping Technology.
Diversification Opportunities for Air China and Kangping Technology
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Kangping is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Kangping Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangping Technology 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 Kangping Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangping Technology has no effect on the direction of Air China i.e., Air China and Kangping Technology go up and down completely randomly.
Pair Corralation between Air China and Kangping Technology
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Kangping Technology. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.68 times less risky than Kangping Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Kangping Technology Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,712 in Kangping Technology Co on September 14, 2024 and sell it today you would earn a total of 702.00 from holding Kangping Technology Co or generate 41.0% 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. Kangping Technology Co
Performance |
| Timeline |
| Air China |
| Kangping Technology |
Air China and Kangping Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Kangping Technology
The main advantage of trading using opposite Air China and Kangping Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Kangping Technology 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 Kangping Technology will offset losses from the drop in Kangping Technology'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 |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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