Correlation Between Air China and ATLANTIC PETROLPF
Can any of the company-specific risk be diversified away by investing in both Air China and ATLANTIC PETROLPF 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 ATLANTIC PETROLPF 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 ATLANTIC PETROLPF DK, you can compare the effects of market volatilities on Air China and ATLANTIC PETROLPF 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 ATLANTIC PETROLPF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and ATLANTIC PETROLPF.
Diversification Opportunities for Air China and ATLANTIC PETROLPF
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and ATLANTIC is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air China Limited and ATLANTIC PETROLPF DK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATLANTIC PETROLPF 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 ATLANTIC PETROLPF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATLANTIC PETROLPF has no effect on the direction of Air China i.e., Air China and ATLANTIC PETROLPF go up and down completely randomly.
Pair Corralation between Air China and ATLANTIC PETROLPF
Assuming the 90 days horizon Air China Limited is expected to generate 0.89 times more return on investment than ATLANTIC PETROLPF. However, Air China Limited is 1.12 times less risky than ATLANTIC PETROLPF. It trades about 0.07 of its potential returns per unit of risk. ATLANTIC PETROLPF DK is currently generating about 0.0 per unit of risk. If you would invest 47.00 in Air China Limited on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Air China Limited or generate 29.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Air China Limited vs. ATLANTIC PETROLPF DK
Performance |
| Timeline |
| Air China Limited |
| ATLANTIC PETROLPF |
Air China and ATLANTIC PETROLPF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and ATLANTIC PETROLPF
The main advantage of trading using opposite Air China and ATLANTIC PETROLPF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, ATLANTIC PETROLPF 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 ATLANTIC PETROLPF will offset losses from the drop in ATLANTIC PETROLPF's 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 |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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