Correlation Between Zhongtong Guomai and Air China
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Air China Ltd, you can compare the effects of market volatilities on Zhongtong Guomai 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 Zhongtong Guomai with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Air China.
Diversification Opportunities for Zhongtong Guomai and Air China
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongtong and Air is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Zhongtong Guomai 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 Zhongtong Guomai Communication 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 Zhongtong Guomai i.e., Zhongtong Guomai and Air China go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Air China
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 1.61 times more return on investment than Air China. However, Zhongtong Guomai is 1.61 times more volatile than Air China Ltd. It trades about 0.23 of its potential returns per unit of risk. Air China Ltd is currently generating about 0.23 per unit of risk. If you would invest 698.00 in Zhongtong Guomai Communication on September 12, 2024 and sell it today you would earn a total of 433.00 from holding Zhongtong Guomai Communication or generate 62.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Air China Ltd
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Air China |
Zhongtong Guomai and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Air China
The main advantage of trading using opposite Zhongtong Guomai and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai 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.| Zhongtong Guomai vs. China Petroleum Chemical | Zhongtong Guomai vs. PetroChina Co Ltd | Zhongtong Guomai vs. China State Construction | Zhongtong Guomai vs. China Railway Group |
| Air China vs. Shanghai Action Education | Air China vs. Heilongjiang Publishing Media | Air China vs. Qtone Education Group | Air China vs. Southern PublishingMedia Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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