Correlation Between Shanghai Action and Air China
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By analyzing existing cross correlation between Shanghai Action Education and Air China Ltd, you can compare the effects of market volatilities on Shanghai Action 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 Shanghai Action with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Action and Air China.
Diversification Opportunities for Shanghai Action and Air China
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shanghai and Air is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Action Education and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Shanghai Action 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 Shanghai Action Education 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 Shanghai Action i.e., Shanghai Action and Air China go up and down completely randomly.
Pair Corralation between Shanghai Action and Air China
Assuming the 90 days trading horizon Shanghai Action is expected to generate 3.37 times less return on investment than Air China. In addition to that, Shanghai Action is 1.44 times more volatile than Air China Ltd. It trades about 0.07 of its total potential returns per unit of risk. Air China Ltd is currently generating about 0.36 per unit of volatility. If you would invest 750.00 in Air China Ltd on September 13, 2024 and sell it today you would earn a total of 129.00 from holding Air China Ltd or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Action Education vs. Air China Ltd
Performance |
| Timeline |
| Shanghai Action Education |
| Air China |
Shanghai Action and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Action and Air China
The main advantage of trading using opposite Shanghai Action and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Action 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.| Shanghai Action vs. Kingclean Electric Co | Shanghai Action vs. Daoming OpticsChemical Co | Shanghai Action vs. Lianhe Chemical Technology | Shanghai Action vs. Miracll Chemicals Co |
| Air China vs. China State Construction | Air China vs. Poly Real Estate | Air China vs. China Vanke Co | Air China vs. China Merchants Shekou |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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