Correlation Between China BlueChemical and Air Lease
Can any of the company-specific risk be diversified away by investing in both China BlueChemical and Air Lease 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 BlueChemical and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Air Lease, you can compare the effects of market volatilities on China BlueChemical and Air Lease 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 BlueChemical with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Air Lease.
Diversification Opportunities for China BlueChemical and Air Lease
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Air is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and China BlueChemical 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 BlueChemical are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of China BlueChemical i.e., China BlueChemical and Air Lease go up and down completely randomly.
Pair Corralation between China BlueChemical and Air Lease
Assuming the 90 days horizon China BlueChemical is expected to generate 2.41 times more return on investment than Air Lease. However, China BlueChemical is 2.41 times more volatile than Air Lease. It trades about 0.08 of its potential returns per unit of risk. Air Lease is currently generating about 0.03 per unit of risk. If you would invest 23.00 in China BlueChemical on November 7, 2024 and sell it today you would earn a total of 3.00 from holding China BlueChemical or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. Air Lease
Performance |
| Timeline |
| China BlueChemical |
| Air Lease |
China BlueChemical and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Air Lease
The main advantage of trading using opposite China BlueChemical and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical position performs unexpectedly, Air Lease 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 Lease will offset losses from the drop in Air Lease's long position.| China BlueChemical vs. Plastic Omnium | China BlueChemical vs. SOGECLAIR SA INH | China BlueChemical vs. Compagnie Plastic Omnium | China BlueChemical vs. VULCAN MATERIALS |
| Air Lease vs. United Rentals | Air Lease vs. Ashtead Group plc | Air Lease vs. AMERCO | Air Lease vs. WillScot Mobile Mini |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| 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 | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |