Correlation Between China Aircraft and Mobile Infrastructure
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Mobile Infrastructure 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 China Aircraft and Mobile Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Aircraft Leasing and Mobile Infrastructure, you can compare the effects of market volatilities on China Aircraft and Mobile Infrastructure 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 China Aircraft with a short position of Mobile Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Mobile Infrastructure.
Diversification Opportunities for China Aircraft and Mobile Infrastructure
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Mobile is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Mobile Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Infrastructure and China Aircraft 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 China Aircraft Leasing are associated (or correlated) with Mobile Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Infrastructure has no effect on the direction of China Aircraft i.e., China Aircraft and Mobile Infrastructure go up and down completely randomly.
Pair Corralation between China Aircraft and Mobile Infrastructure
Assuming the 90 days horizon China Aircraft Leasing is expected to generate 1.06 times more return on investment than Mobile Infrastructure. However, China Aircraft is 1.06 times more volatile than Mobile Infrastructure. It trades about 0.08 of its potential returns per unit of risk. Mobile Infrastructure is currently generating about 0.01 per unit of risk. If you would invest 20.00 in China Aircraft Leasing on September 14, 2024 and sell it today you would earn a total of 20.00 from holding China Aircraft Leasing or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aircraft Leasing vs. Mobile Infrastructure
Performance |
| Timeline |
| China Aircraft Leasing |
| Mobile Infrastructure |
China Aircraft and Mobile Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and Mobile Infrastructure
The main advantage of trading using opposite China Aircraft and Mobile Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Mobile Infrastructure 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 Mobile Infrastructure will offset losses from the drop in Mobile Infrastructure's long position.| China Aircraft vs. JD Sports Fashion | China Aircraft vs. Highway Holdings Limited | China Aircraft vs. Planet Fitness | China Aircraft vs. Hasbro Inc |
| Mobile Infrastructure vs. Delek Drilling | Mobile Infrastructure vs. AKITA Drilling | Mobile Infrastructure vs. Awilco Drilling PLC | Mobile Infrastructure vs. Ecolab Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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