Correlation Between Air China and Komercní Banka
Can any of the company-specific risk be diversified away by investing in both Air China and Komercní Banka 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 Komercní Banka 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 Komercn banka as, you can compare the effects of market volatilities on Air China and Komercní Banka 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 Komercní Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Komercní Banka.
Diversification Opportunities for Air China and Komercní Banka
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Komercní is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Air China Limited and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as 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 Komercní Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of Air China i.e., Air China and Komercní Banka go up and down completely randomly.
Pair Corralation between Air China and Komercní Banka
Assuming the 90 days horizon Air China Limited is expected to generate 1.71 times more return on investment than Komercní Banka. However, Air China is 1.71 times more volatile than Komercn banka as. It trades about 0.21 of its potential returns per unit of risk. Komercn banka as is currently generating about 0.02 per unit of risk. If you would invest 52.00 in Air China Limited on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Air China Limited or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Air China Limited vs. Komercn banka as
Performance |
| Timeline |
| Air China Limited |
| Komercn banka as |
Air China and Komercní Banka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Komercní Banka
The main advantage of trading using opposite Air China and Komercní Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Komercní Banka 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 Komercní Banka will offset losses from the drop in Komercní Banka's long position.| Air China vs. TRADEDOUBLER AB SK | Air China vs. Auto Trader Group | Air China vs. AUTO TRADER ADR | Air China vs. Fast Retailing Co |
| Komercní Banka vs. Superior Plus Corp | Komercní Banka vs. NMI Holdings | Komercní Banka vs. Origin Agritech | Komercní Banka vs. SIVERS SEMICONDUCTORS AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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