Correlation Between Air China and RoadMain T
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By analyzing existing cross correlation between Air China Ltd and RoadMain T Co, you can compare the effects of market volatilities on Air China and RoadMain T 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 RoadMain T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and RoadMain T.
Diversification Opportunities for Air China and RoadMain T
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and RoadMain is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and RoadMain T Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoadMain T 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 RoadMain T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoadMain T has no effect on the direction of Air China i.e., Air China and RoadMain T go up and down completely randomly.
Pair Corralation between Air China and RoadMain T
Assuming the 90 days trading horizon Air China Ltd is expected to generate 0.77 times more return on investment than RoadMain T. However, Air China Ltd is 1.3 times less risky than RoadMain T. It trades about -0.03 of its potential returns per unit of risk. RoadMain T Co is currently generating about -0.04 per unit of risk. If you would invest 827.00 in Air China Ltd on September 28, 2024 and sell it today you would lose (16.00) from holding Air China Ltd or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. RoadMain T Co
Performance |
| Timeline |
| Air China |
| RoadMain T |
Air China and RoadMain T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and RoadMain T
The main advantage of trading using opposite Air China and RoadMain T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, RoadMain T 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 RoadMain T will offset losses from the drop in RoadMain T'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 |
| RoadMain T vs. Ming Yang Smart | RoadMain T vs. 159681 | RoadMain T vs. 159005 | RoadMain T vs. Loctek Ergonomic Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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