Correlation Between Air China and Montage Technology
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By analyzing existing cross correlation between Air China Ltd and Montage Technology Co, you can compare the effects of market volatilities on Air China and Montage Technology 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 Montage Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Montage Technology.
Diversification Opportunities for Air China and Montage Technology
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Montage is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Montage Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage Technology 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 Montage Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Technology has no effect on the direction of Air China i.e., Air China and Montage Technology go up and down completely randomly.
Pair Corralation between Air China and Montage Technology
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Montage Technology. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.75 times less risky than Montage Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Montage Technology Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,952 in Montage Technology Co on October 16, 2024 and sell it today you would earn a total of 339.00 from holding Montage Technology Co or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Montage Technology Co
Performance |
| Timeline |
| Air China |
| Montage Technology |
Air China and Montage Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Montage Technology
The main advantage of trading using opposite Air China and Montage Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Montage Technology 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 Montage Technology will offset losses from the drop in Montage Technology'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 |
| Montage Technology vs. Ningbo Kangqiang Electronics | Montage Technology vs. Success Electronics | Montage Technology vs. HeBei Jinniu Chemical | Montage Technology vs. Ningxia Younglight Chemicals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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