Correlation Between Air China and Dongxing Sec
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By analyzing existing cross correlation between Air China Ltd and Dongxing Sec Co, you can compare the effects of market volatilities on Air China and Dongxing Sec 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 Dongxing Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Dongxing Sec.
Diversification Opportunities for Air China and Dongxing Sec
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Dongxing is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Dongxing Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongxing Sec 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 Dongxing Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongxing Sec has no effect on the direction of Air China i.e., Air China and Dongxing Sec go up and down completely randomly.
Pair Corralation between Air China and Dongxing Sec
Assuming the 90 days trading horizon Air China Ltd is expected to generate 0.46 times more return on investment than Dongxing Sec. However, Air China Ltd is 2.15 times less risky than Dongxing Sec. It trades about 0.18 of its potential returns per unit of risk. Dongxing Sec Co is currently generating about -0.08 per unit of risk. If you would invest 761.00 in Air China Ltd on September 4, 2024 and sell it today you would earn a total of 49.00 from holding Air China Ltd or generate 6.44% 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. Dongxing Sec Co
Performance |
| Timeline |
| Air China |
| Dongxing Sec |
Air China and Dongxing Sec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Dongxing Sec
The main advantage of trading using opposite Air China and Dongxing Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Dongxing Sec 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 Dongxing Sec will offset losses from the drop in Dongxing Sec's long position.| Air China vs. Industrial Bank Co | Air China vs. Zhengping RoadBridge Constr | Air China vs. Unisplendour Corp | Air China vs. Postal Savings Bank |
| Dongxing Sec vs. Rising Nonferrous Metals | Dongxing Sec vs. Ye Chiu Metal | Dongxing Sec vs. Guangdong Jingyi Metal | Dongxing Sec vs. GRINM Semiconductor Materials |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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