Correlation Between Air China and Xingguang Agricultural
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By analyzing existing cross correlation between Air China Ltd and Xingguang Agricultural Mach, you can compare the effects of market volatilities on Air China and Xingguang Agricultural 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 Xingguang Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Xingguang Agricultural.
Diversification Opportunities for Air China and Xingguang Agricultural
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Xingguang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Xingguang Agricultural Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xingguang Agricultural 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 Xingguang Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xingguang Agricultural has no effect on the direction of Air China i.e., Air China and Xingguang Agricultural go up and down completely randomly.
Pair Corralation between Air China and Xingguang Agricultural
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Xingguang Agricultural. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.94 times less risky than Xingguang Agricultural. The stock trades about -0.03 of its potential returns per unit of risk. The Xingguang Agricultural Mach is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 899.00 in Xingguang Agricultural Mach on October 16, 2024 and sell it today you would lose (172.00) from holding Xingguang Agricultural Mach or give up 19.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Xingguang Agricultural Mach
Performance |
| Timeline |
| Air China |
| Xingguang Agricultural |
Air China and Xingguang Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Xingguang Agricultural
The main advantage of trading using opposite Air China and Xingguang Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Xingguang Agricultural 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 Xingguang Agricultural will offset losses from the drop in Xingguang Agricultural's long position.| Air China vs. Huasi Agricultural Development | Air China vs. Fiberhome Telecommunication Technologies | Air China vs. Weichai Heavy Machinery | Air China vs. Nanxing Furniture Machinery |
| Xingguang Agricultural vs. Air China Ltd | Xingguang Agricultural vs. HanS Laser Tech | Xingguang Agricultural vs. Guangzhou Restaurants Group | Xingguang Agricultural vs. Fujian Newland Computer |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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