Correlation Between Molekule and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Molekule 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 Molekule and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molekule Group and China Aircraft Leasing, you can compare the effects of market volatilities on Molekule 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 Molekule with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molekule and China Aircraft.
Diversification Opportunities for Molekule and China Aircraft
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Molekule and China is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Molekule Group 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 Molekule 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 Molekule Group 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 Molekule i.e., Molekule and China Aircraft go up and down completely randomly.
Pair Corralation between Molekule and China Aircraft
Given the investment horizon of 90 days Molekule Group is expected to generate 1.3 times more return on investment than China Aircraft. However, Molekule is 1.3 times more volatile than China Aircraft Leasing. It trades about 0.58 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about 0.07 per unit of risk. If you would invest 206.00 in Molekule Group on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Molekule Group or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.85% |
| Values | Daily Returns |
Molekule Group vs. China Aircraft Leasing
Performance |
| Timeline |
| Molekule Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Aircraft Leasing |
Molekule and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molekule and China Aircraft
The main advantage of trading using opposite Molekule and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molekule 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.| Molekule vs. Simon Property Group | Molekule vs. Volaris | Molekule vs. National Vision Holdings | Molekule vs. Copa Holdings SA |
| China Aircraft vs. United Rentals | China Aircraft vs. Ashtead Gro | China Aircraft vs. Ashtead Group plc | China Aircraft vs. AerCap Holdings NV |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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