Correlation Between Air China and Cultural Investment
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By analyzing existing cross correlation between Air China Ltd and Cultural Investment Holdings, you can compare the effects of market volatilities on Air China and Cultural Investment 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 Cultural Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Cultural Investment.
Diversification Opportunities for Air China and Cultural Investment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Cultural is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Cultural Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultural Investment 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 Cultural Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultural Investment has no effect on the direction of Air China i.e., Air China and Cultural Investment go up and down completely randomly.
Pair Corralation between Air China and Cultural Investment
Assuming the 90 days trading horizon Air China is expected to generate 2.53 times less return on investment than Cultural Investment. But when comparing it to its historical volatility, Air China Ltd is 1.7 times less risky than Cultural Investment. It trades about 0.06 of its potential returns per unit of risk. Cultural Investment Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Cultural Investment Holdings on August 31, 2024 and sell it today you would earn a total of 51.00 from holding Cultural Investment Holdings or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Cultural Investment Holdings
Performance |
| Timeline |
| Air China |
| Cultural Investment |
Air China and Cultural Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Cultural Investment
The main advantage of trading using opposite Air China and Cultural Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Cultural Investment 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 Cultural Investment will offset losses from the drop in Cultural Investment'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 |
| Cultural Investment vs. BYD Co Ltd | Cultural Investment vs. Agricultural Bank of | Cultural Investment vs. Industrial and Commercial | Cultural Investment vs. China State Construction |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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