Correlation Between Cosan SA and China Aviation
Can any of the company-specific risk be diversified away by investing in both Cosan SA and China Aviation 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 Cosan SA and China Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA ADR and China Aviation Oil, you can compare the effects of market volatilities on Cosan SA and China Aviation 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 Cosan SA with a short position of China Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and China Aviation.
Diversification Opportunities for Cosan SA and China Aviation
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cosan and China is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR and China Aviation Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aviation Oil and Cosan SA 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 Cosan SA ADR are associated (or correlated) with China Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aviation Oil has no effect on the direction of Cosan SA i.e., Cosan SA and China Aviation go up and down completely randomly.
Pair Corralation between Cosan SA and China Aviation
If you would invest 55.00 in China Aviation Oil on September 13, 2024 and sell it today you would earn a total of 0.00 from holding China Aviation Oil or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Cosan SA ADR vs. China Aviation Oil
Performance |
| Timeline |
| Cosan SA ADR |
| China Aviation Oil |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cosan SA and China Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and China Aviation
The main advantage of trading using opposite Cosan SA and China Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, China Aviation 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 China Aviation will offset losses from the drop in China Aviation's long position.| Cosan SA vs. Delek Energy | Cosan SA vs. Crossamerica Partners LP | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Valvoline |
| China Aviation vs. Delek Energy | China Aviation vs. Cosan SA ADR | China Aviation vs. Star Gas Partners | China Aviation vs. HF Sinclair Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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