Correlation Between China Aircraft and Turning Point
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Turning Point 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 Turning Point 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 Turning Point Brands, you can compare the effects of market volatilities on China Aircraft and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Turning Point.
Diversification Opportunities for China Aircraft and Turning Point
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Turning is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of China Aircraft i.e., China Aircraft and Turning Point go up and down completely randomly.
Pair Corralation between China Aircraft and Turning Point
Assuming the 90 days horizon China Aircraft Leasing is expected to generate 1.88 times more return on investment than Turning Point. However, China Aircraft is 1.88 times more volatile than Turning Point Brands. It trades about 0.08 of its potential returns per unit of risk. Turning Point Brands is currently generating about 0.12 per unit of risk. If you would invest 13.00 in China Aircraft Leasing on September 2, 2024 and sell it today you would earn a total of 27.00 from holding China Aircraft Leasing or generate 207.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Aircraft Leasing vs. Turning Point Brands
Performance |
| Timeline |
| China Aircraft Leasing |
| Turning Point Brands |
China Aircraft and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Aircraft and Turning Point
The main advantage of trading using opposite China Aircraft and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point's long position.| China Aircraft vs. Ambev SA ADR | China Aircraft vs. Volaris | China Aircraft vs. Copa Holdings SA | China Aircraft vs. Molson Coors Brewing |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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