Correlation Between Southern PublishingMedia and Air China
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By analyzing existing cross correlation between Southern PublishingMedia Co and Air China Ltd, you can compare the effects of market volatilities on Southern PublishingMedia and Air China 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 Southern PublishingMedia with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern PublishingMedia and Air China.
Diversification Opportunities for Southern PublishingMedia and Air China
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and Air is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Southern PublishingMedia Co and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Southern PublishingMedia 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 Southern PublishingMedia Co are associated (or correlated) with Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China has no effect on the direction of Southern PublishingMedia i.e., Southern PublishingMedia and Air China go up and down completely randomly.
Pair Corralation between Southern PublishingMedia and Air China
Assuming the 90 days trading horizon Southern PublishingMedia Co is expected to generate 0.67 times more return on investment than Air China. However, Southern PublishingMedia Co is 1.49 times less risky than Air China. It trades about 0.27 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.07 per unit of risk. If you would invest 1,500 in Southern PublishingMedia Co on November 3, 2024 and sell it today you would earn a total of 112.00 from holding Southern PublishingMedia Co or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern PublishingMedia Co vs. Air China Ltd
Performance |
| Timeline |
| Southern PublishingMedia |
| Air China |
Southern PublishingMedia and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern PublishingMedia and Air China
The main advantage of trading using opposite Southern PublishingMedia and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern PublishingMedia position performs unexpectedly, Air China 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 Air China will offset losses from the drop in Air China's long position.The idea behind Southern PublishingMedia Co and Air China Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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