Correlation Between Air China and Shanghai Pudong
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By analyzing existing cross correlation between Air China Ltd and Shanghai Pudong Development, you can compare the effects of market volatilities on Air China and Shanghai Pudong 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 Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Shanghai Pudong.
Diversification Opportunities for Air China and Shanghai Pudong
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Shanghai is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve 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 Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of Air China i.e., Air China and Shanghai Pudong go up and down completely randomly.
Pair Corralation between Air China and Shanghai Pudong
Assuming the 90 days trading horizon Air China Ltd is expected to generate 1.15 times more return on investment than Shanghai Pudong. However, Air China is 1.15 times more volatile than Shanghai Pudong Development. It trades about 0.1 of its potential returns per unit of risk. Shanghai Pudong Development is currently generating about -0.14 per unit of risk. If you would invest 772.00 in Air China Ltd on September 3, 2024 and sell it today you would earn a total of 56.00 from holding Air China Ltd or generate 7.25% 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. Shanghai Pudong Development
Performance |
| Timeline |
| Air China |
| Shanghai Pudong Deve |
Air China and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Shanghai Pudong
The main advantage of trading using opposite Air China and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Shanghai Pudong 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 Shanghai Pudong will offset losses from the drop in Shanghai Pudong's long position.| Air China vs. Cultural Investment Holdings | Air China vs. Gome Telecom Equipment | Air China vs. Bus Online Co | Air China vs. Holitech Technology Co |
| Shanghai Pudong vs. Jilin Jlu Communication | Shanghai Pudong vs. Zhongtong Guomai Communication | Shanghai Pudong vs. Wintao Communications Co | Shanghai Pudong vs. Muyuan Foodstuff Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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