Correlation Between Custom Truck and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Custom Truck and China Aircraft 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 Custom Truck and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Custom Truck One and China Aircraft Leasing, you can compare the effects of market volatilities on Custom Truck and China Aircraft 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 Custom Truck with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Custom Truck and China Aircraft.
Diversification Opportunities for Custom Truck and China Aircraft
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Custom and China is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing and Custom Truck 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 Custom Truck One are associated (or correlated) with China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Custom Truck i.e., Custom Truck and China Aircraft go up and down completely randomly.
Pair Corralation between Custom Truck and China Aircraft
Given the investment horizon of 90 days Custom Truck is expected to generate 35.81 times less return on investment than China Aircraft. But when comparing it to its historical volatility, Custom Truck One is 1.28 times less risky than China Aircraft. It trades about 0.0 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in China Aircraft Leasing on August 25, 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 |
Custom Truck One vs. China Aircraft Leasing
Performance |
| Timeline |
| Custom Truck One |
| China Aircraft Leasing |
Custom Truck and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Custom Truck and China Aircraft
The main advantage of trading using opposite Custom Truck and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck position performs unexpectedly, China Aircraft 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 Aircraft will offset losses from the drop in China Aircraft's long position.| Custom Truck vs. PROG Holdings | Custom Truck vs. McGrath RentCorp | Custom Truck vs. Mega Matrix Corp | Custom Truck vs. FTAI Aviation Ltd |
| China Aircraft vs. Patterson UTI Energy | China Aircraft vs. BioNTech SE | China Aircraft vs. Helmerich and Payne | China Aircraft vs. Sellas Life Sciences |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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