Correlation Between China Aircraft and Sapiens International
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Sapiens International 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 Sapiens International 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 Sapiens International, you can compare the effects of market volatilities on China Aircraft and Sapiens International 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 Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Sapiens International.
Diversification Opportunities for China Aircraft and Sapiens International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Sapiens is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of China Aircraft i.e., China Aircraft and Sapiens International go up and down completely randomly.
Pair Corralation between China Aircraft and Sapiens International
Assuming the 90 days horizon China Aircraft Leasing is expected to generate 1.73 times more return on investment than Sapiens International. However, China Aircraft is 1.73 times more volatile than Sapiens International. It trades about 0.08 of its potential returns per unit of risk. Sapiens International is currently generating about 0.03 per unit of risk. If you would invest 20.00 in China Aircraft Leasing on September 3, 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. Sapiens International
Performance |
| Timeline |
| China Aircraft Leasing |
| Sapiens International |
China Aircraft and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and Sapiens International
The main advantage of trading using opposite China Aircraft and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.| China Aircraft vs. United Rentals | China Aircraft vs. Ashtead Gro | China Aircraft vs. Ashtead Group plc | China Aircraft vs. AerCap Holdings NV |
| Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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