Correlation Between Minerals Technologies and AIR CHINA
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies 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 Minerals Technologies and AIR CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and AIR CHINA LTD, you can compare the effects of market volatilities on Minerals Technologies 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 Minerals Technologies with a short position of AIR CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and AIR CHINA.
Diversification Opportunities for Minerals Technologies and AIR CHINA
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Minerals and AIR is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and AIR CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR CHINA LTD and Minerals Technologies 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 Minerals Technologies 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 LTD has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and AIR CHINA go up and down completely randomly.
Pair Corralation between Minerals Technologies and AIR CHINA
Assuming the 90 days horizon Minerals Technologies is expected to generate 0.59 times more return on investment than AIR CHINA. However, Minerals Technologies is 1.7 times less risky than AIR CHINA. It trades about 0.06 of its potential returns per unit of risk. AIR CHINA LTD is currently generating about 0.0 per unit of risk. If you would invest 5,154 in Minerals Technologies on October 12, 2024 and sell it today you would earn a total of 1,946 from holding Minerals Technologies or generate 37.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerals Technologies vs. AIR CHINA LTD
Performance |
| Timeline |
| Minerals Technologies |
| AIR CHINA LTD |
Minerals Technologies and AIR CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and AIR CHINA
The main advantage of trading using opposite Minerals Technologies and AIR CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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.| Minerals Technologies vs. TRADEGATE | Minerals Technologies vs. SALESFORCE INC CDR | Minerals Technologies vs. Caseys General Stores | Minerals Technologies vs. SPARTAN STORES |
| AIR CHINA vs. Minerals Technologies | AIR CHINA vs. CNVISION MEDIA | AIR CHINA vs. AAC TECHNOLOGHLDGADR | AIR CHINA vs. Fuji Media Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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