Correlation Between Air China and Sunny Loan
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By analyzing existing cross correlation between Air China Ltd and Sunny Loan Top, you can compare the effects of market volatilities on Air China and Sunny Loan 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 Sunny Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Sunny Loan.
Diversification Opportunities for Air China and Sunny Loan
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Sunny is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Sunny Loan Top in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Loan Top 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 Sunny Loan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Loan Top has no effect on the direction of Air China i.e., Air China and Sunny Loan go up and down completely randomly.
Pair Corralation between Air China and Sunny Loan
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Sunny Loan. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.16 times less risky than Sunny Loan. The stock trades about -0.05 of its potential returns per unit of risk. The Sunny Loan Top is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,019 in Sunny Loan Top on September 28, 2024 and sell it today you would earn a total of 34.00 from holding Sunny Loan Top or generate 3.34% 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. Sunny Loan Top
Performance |
| Timeline |
| Air China |
| Sunny Loan Top |
Air China and Sunny Loan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Sunny Loan
The main advantage of trading using opposite Air China and Sunny Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Sunny Loan 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 Sunny Loan will offset losses from the drop in Sunny Loan's long position.| Air China vs. Industrial and Commercial | Air China vs. Agricultural Bank of | Air China vs. China Construction Bank | Air China vs. Bank of China |
| Sunny Loan vs. Eastroc Beverage Group | Sunny Loan vs. Railway Signal Communication | Sunny Loan vs. Haima Automobile Group | Sunny Loan vs. Eastern Communications 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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