Correlation Between China Aircraft and Borealis Foods
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Borealis Foods 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 Borealis Foods 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 Borealis Foods, you can compare the effects of market volatilities on China Aircraft and Borealis Foods 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 Borealis Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Borealis Foods.
Diversification Opportunities for China Aircraft and Borealis Foods
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Borealis is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Borealis Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borealis Foods 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 Borealis Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borealis Foods has no effect on the direction of China Aircraft i.e., China Aircraft and Borealis Foods go up and down completely randomly.
Pair Corralation between China Aircraft and Borealis Foods
If you would invest 6.57 in Borealis Foods on September 6, 2024 and sell it today you would earn a total of 0.83 from holding Borealis Foods or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
China Aircraft Leasing vs. Borealis Foods
Performance |
| Timeline |
| China Aircraft Leasing |
| Borealis Foods |
China Aircraft and Borealis Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and Borealis Foods
The main advantage of trading using opposite China Aircraft and Borealis Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Borealis Foods 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 Borealis Foods will offset losses from the drop in Borealis Foods' long position.| China Aircraft vs. Fast Retailing Co | China Aircraft vs. Chewy Inc | China Aircraft vs. Asbury Automotive Group | China Aircraft vs. Cedar Realty Trust |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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