Correlation Between Maanshan Iron and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron and Cebu Air 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 Maanshan Iron and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and Cebu Air ADR, you can compare the effects of market volatilities on Maanshan Iron and Cebu Air 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 Maanshan Iron with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Cebu Air.
Diversification Opportunities for Maanshan Iron and Cebu Air
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maanshan and Cebu is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR and Maanshan Iron 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 Maanshan Iron Steel are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and Cebu Air go up and down completely randomly.
Pair Corralation between Maanshan Iron and Cebu Air
Assuming the 90 days horizon Maanshan Iron Steel is expected to generate 1.15 times more return on investment than Cebu Air. However, Maanshan Iron is 1.15 times more volatile than Cebu Air ADR. It trades about 0.0 of its potential returns per unit of risk. Cebu Air ADR is currently generating about -0.02 per unit of risk. If you would invest 20.00 in Maanshan Iron Steel on August 26, 2024 and sell it today you would lose (5.00) from holding Maanshan Iron Steel or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Cebu Air ADR
Performance |
| Timeline |
| Maanshan Iron Steel |
| Cebu Air ADR |
Maanshan Iron and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Cebu Air
The main advantage of trading using opposite Maanshan Iron and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. Mesabi Trust | Maanshan Iron vs. Universal Stainless Alloy | Maanshan Iron vs. POSCO Holdings |
| Cebu Air vs. Air China Limited | Cebu Air vs. Air France KLM SA | Cebu Air vs. AirAsia Group Berhad | Cebu Air vs. China Southern Airlines |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |