Correlation Between Air China and Hangzhou Guotai
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By analyzing existing cross correlation between Air China Ltd and Hangzhou Guotai Environmental, you can compare the effects of market volatilities on Air China and Hangzhou Guotai 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 Hangzhou Guotai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Hangzhou Guotai.
Diversification Opportunities for Air China and Hangzhou Guotai
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Hangzhou is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Hangzhou Guotai Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Guotai Envi 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 Hangzhou Guotai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Guotai Envi has no effect on the direction of Air China i.e., Air China and Hangzhou Guotai go up and down completely randomly.
Pair Corralation between Air China and Hangzhou Guotai
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Hangzhou Guotai. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.23 times less risky than Hangzhou Guotai. The stock trades about -0.12 of its potential returns per unit of risk. The Hangzhou Guotai Environmental is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,950 in Hangzhou Guotai Environmental on November 1, 2024 and sell it today you would earn a total of 220.00 from holding Hangzhou Guotai Environmental or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Hangzhou Guotai Environmental
Performance |
| Timeline |
| Air China |
| Hangzhou Guotai Envi |
Air China and Hangzhou Guotai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Hangzhou Guotai
The main advantage of trading using opposite Air China and Hangzhou Guotai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Hangzhou Guotai 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 Hangzhou Guotai will offset losses from the drop in Hangzhou Guotai's long position.| Air China vs. Glodon Software Co | Air China vs. Chongqing Changan Automobile | Air China vs. Dareway Software Co | Air China vs. Dhc Software Co |
| Hangzhou Guotai vs. Industrial and Commercial | Hangzhou Guotai vs. Agricultural Bank of | Hangzhou Guotai vs. China Construction Bank | Hangzhou Guotai vs. Bank of China |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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