Correlation Between Air China and TechnoPro Holdings
Can any of the company-specific risk be diversified away by investing in both Air China and TechnoPro Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Air China and TechnoPro Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air China Limited and TechnoPro Holdings, you can compare the effects of market volatilities on Air China and TechnoPro Holdings 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 TechnoPro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and TechnoPro Holdings.
Diversification Opportunities for Air China and TechnoPro Holdings
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and TechnoPro is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Air China Limited and TechnoPro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoPro Holdings 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 Limited are associated (or correlated) with TechnoPro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoPro Holdings has no effect on the direction of Air China i.e., Air China and TechnoPro Holdings go up and down completely randomly.
Pair Corralation between Air China and TechnoPro Holdings
Assuming the 90 days horizon Air China Limited is expected to generate 1.65 times more return on investment than TechnoPro Holdings. However, Air China is 1.65 times more volatile than TechnoPro Holdings. It trades about 0.01 of its potential returns per unit of risk. TechnoPro Holdings is currently generating about -0.02 per unit of risk. If you would invest 68.00 in Air China Limited on September 2, 2024 and sell it today you would lose (7.00) from holding Air China Limited or give up 10.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Limited vs. TechnoPro Holdings
Performance |
| Timeline |
| Air China Limited |
| TechnoPro Holdings |
Air China and TechnoPro Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and TechnoPro Holdings
The main advantage of trading using opposite Air China and TechnoPro Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, TechnoPro Holdings 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 TechnoPro Holdings will offset losses from the drop in TechnoPro Holdings' long position.| Air China vs. GungHo Online Entertainment | Air China vs. CODERE ONLINE LUX | Air China vs. SERI INDUSTRIAL EO | Air China vs. SIMS METAL MGT |
| TechnoPro Holdings vs. Cogent Communications Holdings | TechnoPro Holdings vs. TAL Education Group | TechnoPro Holdings vs. SK TELECOM TDADR | TechnoPro Holdings vs. Xinhua Winshare Publishing |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |