Correlation Between Air China and Shareate Tools
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By analyzing existing cross correlation between Air China Ltd and Shareate Tools, you can compare the effects of market volatilities on Air China and Shareate Tools 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 Shareate Tools. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Shareate Tools.
Diversification Opportunities for Air China and Shareate Tools
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Shareate is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Shareate Tools in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shareate Tools 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 Shareate Tools. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shareate Tools has no effect on the direction of Air China i.e., Air China and Shareate Tools go up and down completely randomly.
Pair Corralation between Air China and Shareate Tools
Assuming the 90 days trading horizon Air China is expected to generate 1.58 times less return on investment than Shareate Tools. But when comparing it to its historical volatility, Air China Ltd is 2.3 times less risky than Shareate Tools. It trades about 0.02 of its potential returns per unit of risk. Shareate Tools is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,872 in Shareate Tools on September 14, 2024 and sell it today you would lose (62.00) from holding Shareate Tools or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Air China Ltd vs. Shareate Tools
Performance |
| Timeline |
| Air China |
| Shareate Tools |
Air China and Shareate Tools Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Shareate Tools
The main advantage of trading using opposite Air China and Shareate Tools positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Shareate Tools 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 Shareate Tools will offset losses from the drop in Shareate Tools' long position.| Air China vs. China State Construction | Air China vs. Poly Real Estate | Air China vs. China Vanke Co | Air China vs. China Merchants Shekou |
| Shareate Tools vs. Guangdong Brandmax Marketing | Shareate Tools vs. Shanghai Ziyan Foods | Shareate Tools vs. Dongfeng Automobile Co | Shareate Tools vs. Guangdong Wens Foodstuff |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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