Correlation Between Air China and Hangzhou EZVIZ
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By analyzing existing cross correlation between Air China Ltd and Hangzhou EZVIZ Network, you can compare the effects of market volatilities on Air China and Hangzhou EZVIZ 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 Hangzhou EZVIZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Hangzhou EZVIZ.
Diversification Opportunities for Air China and Hangzhou EZVIZ
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Hangzhou is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Hangzhou EZVIZ Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou EZVIZ Network 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 Hangzhou EZVIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou EZVIZ Network has no effect on the direction of Air China i.e., Air China and Hangzhou EZVIZ go up and down completely randomly.
Pair Corralation between Air China and Hangzhou EZVIZ
Assuming the 90 days trading horizon Air China Ltd is expected to under-perform the Hangzhou EZVIZ. But the stock apears to be less risky and, when comparing its historical volatility, Air China Ltd is 1.6 times less risky than Hangzhou EZVIZ. The stock trades about -0.01 of its potential returns per unit of risk. The Hangzhou EZVIZ Network is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,077 in Hangzhou EZVIZ Network on October 30, 2024 and sell it today you would earn a total of 401.00 from holding Hangzhou EZVIZ Network or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Air China Ltd vs. Hangzhou EZVIZ Network
Performance |
| Timeline |
| Air China |
| Hangzhou EZVIZ Network |
Air China and Hangzhou EZVIZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Hangzhou EZVIZ
The main advantage of trading using opposite Air China and Hangzhou EZVIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Hangzhou EZVIZ 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 Hangzhou EZVIZ will offset losses from the drop in Hangzhou EZVIZ's long position.| Air China vs. Innovative Medical Management | Air China vs. Sichuan Yahua Industrial | Air China vs. Hainan Airlines Co | Air China vs. CICC Fund Management |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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