Correlation Between II VI and China Aircraft
Can any of the company-specific risk be diversified away by investing in both II VI 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 II VI and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between II VI Incorporated and China Aircraft Leasing, you can compare the effects of market volatilities on II VI 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 II VI with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of II VI and China Aircraft.
Diversification Opportunities for II VI and China Aircraft
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IIVIP and China is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding II VI Incorporated 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 II VI 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 II VI Incorporated 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 II VI i.e., II VI and China Aircraft go up and down completely randomly.
Pair Corralation between II VI and China Aircraft
Assuming the 90 days horizon II VI Incorporated is expected to generate 0.56 times more return on investment than China Aircraft. However, II VI Incorporated is 1.8 times less risky than China Aircraft. It trades about 0.26 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.08 per unit of risk. If you would invest 15,107 in II VI Incorporated on September 13, 2024 and sell it today you would earn a total of 3,644 from holding II VI Incorporated or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.3% |
| Values | Daily Returns |
II VI Incorporated vs. China Aircraft Leasing
Performance |
| Timeline |
| II VI |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Aircraft Leasing |
II VI and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with II VI and China Aircraft
The main advantage of trading using opposite II VI and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if II VI 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.| II VI vs. Avadel Pharmaceuticals PLC | II VI vs. Teleflex Incorporated | II VI vs. Insteel Industries | II VI vs. Viemed Healthcare |
| China Aircraft vs. BRP Inc | China Aircraft vs. Genfit | China Aircraft vs. Hasbro Inc | China Aircraft vs. JD Sports Fashion |
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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