Correlation Between AIR CHINA and ASSOC BR
Can any of the company-specific risk be diversified away by investing in both AIR CHINA and ASSOC BR 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 ASSOC BR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR CHINA LTD and ASSOC BR FOODS, you can compare the effects of market volatilities on AIR CHINA and ASSOC BR 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 ASSOC BR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR CHINA and ASSOC BR.
Diversification Opportunities for AIR CHINA and ASSOC BR
Significant diversification
The 3 months correlation between AIR and ASSOC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding AIR CHINA LTD and ASSOC BR FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSOC BR FOODS 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 LTD are associated (or correlated) with ASSOC BR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSOC BR FOODS has no effect on the direction of AIR CHINA i.e., AIR CHINA and ASSOC BR go up and down completely randomly.
Pair Corralation between AIR CHINA and ASSOC BR
Assuming the 90 days trading horizon AIR CHINA LTD is expected to under-perform the ASSOC BR. In addition to that, AIR CHINA is 1.89 times more volatile than ASSOC BR FOODS. It trades about -0.01 of its total potential returns per unit of risk. ASSOC BR FOODS is currently generating about 0.07 per unit of volatility. If you would invest 1,714 in ASSOC BR FOODS on September 12, 2024 and sell it today you would earn a total of 946.00 from holding ASSOC BR FOODS or generate 55.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR CHINA LTD vs. ASSOC BR FOODS
Performance |
| Timeline |
| AIR CHINA LTD |
| ASSOC BR FOODS |
AIR CHINA and ASSOC BR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR CHINA and ASSOC BR
The main advantage of trading using opposite AIR CHINA and ASSOC BR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR CHINA position performs unexpectedly, ASSOC BR 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 ASSOC BR will offset losses from the drop in ASSOC BR's long position.| AIR CHINA vs. ASSOC BR FOODS | AIR CHINA vs. Lion One Metals | AIR CHINA vs. PARKEN Sport Entertainment | AIR CHINA vs. PREMIER FOODS |
| ASSOC BR vs. Hormel Foods | ASSOC BR vs. Superior Plus Corp | ASSOC BR vs. SIVERS SEMICONDUCTORS AB | ASSOC BR vs. NorAm Drilling AS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |