Correlation Between Air China and Cabio Biotech
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By analyzing existing cross correlation between Air China Ltd and Cabio Biotech Wuhan, you can compare the effects of market volatilities on Air China and Cabio Biotech 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 Cabio Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Cabio Biotech.
Diversification Opportunities for Air China and Cabio Biotech
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Cabio is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Cabio Biotech Wuhan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabio Biotech Wuhan 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 Cabio Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabio Biotech Wuhan has no effect on the direction of Air China i.e., Air China and Cabio Biotech go up and down completely randomly.
Pair Corralation between Air China and Cabio Biotech
Assuming the 90 days trading horizon Air China Ltd is expected to generate 0.53 times more return on investment than Cabio Biotech. However, Air China Ltd is 1.87 times less risky than Cabio Biotech. It trades about -0.03 of its potential returns per unit of risk. Cabio Biotech Wuhan is currently generating about -0.03 per unit of risk. If you would invest 1,039 in Air China Ltd on October 16, 2024 and sell it today you would lose (311.00) from holding Air China Ltd or give up 29.93% 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. Cabio Biotech Wuhan
Performance |
| Timeline |
| Air China |
| Cabio Biotech Wuhan |
Air China and Cabio Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Cabio Biotech
The main advantage of trading using opposite Air China and Cabio Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Cabio Biotech 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 Cabio Biotech will offset losses from the drop in Cabio Biotech'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 |
| Cabio Biotech vs. Ming Yang Smart | Cabio Biotech vs. 159681 | Cabio Biotech vs. 159005 | Cabio Biotech 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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