Correlation Between Entravision Communications and Air China
Can any of the company-specific risk be diversified away by investing in both Entravision Communications and Air China 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 Entravision Communications and Air China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and Air China Limited, you can compare the effects of market volatilities on Entravision Communications and Air China 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 Entravision Communications with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Air China.
Diversification Opportunities for Entravision Communications and Air China
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Entravision and Air is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications and Air China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China Limited and Entravision Communications 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 Entravision Communications are associated (or correlated) with Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China Limited has no effect on the direction of Entravision Communications i.e., Entravision Communications and Air China go up and down completely randomly.
Pair Corralation between Entravision Communications and Air China
Assuming the 90 days horizon Entravision Communications is expected to generate 1.46 times less return on investment than Air China. In addition to that, Entravision Communications is 2.31 times more volatile than Air China Limited. It trades about 0.12 of its total potential returns per unit of risk. Air China Limited is currently generating about 0.4 per unit of volatility. If you would invest 52.00 in Air China Limited on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Air China Limited or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entravision Communications vs. Air China Limited
Performance |
| Timeline |
| Entravision Communications |
| Air China Limited |
Entravision Communications and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and Air China
The main advantage of trading using opposite Entravision Communications and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications position performs unexpectedly, Air China 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 Air China will offset losses from the drop in Air China's long position.| Entravision Communications vs. News Corporation | Entravision Communications vs. News Corporation | Entravision Communications vs. Superior Plus Corp | Entravision Communications vs. NMI Holdings |
| Air China vs. Entravision Communications | Air China vs. Hemisphere Energy Corp | Air China vs. Charter Communications | Air China vs. LION ONE METALS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |