Correlation Between TRADEDOUBLER and Air China
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER 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 TRADEDOUBLER and Air China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and Air China Limited, you can compare the effects of market volatilities on TRADEDOUBLER 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 TRADEDOUBLER with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and Air China.
Diversification Opportunities for TRADEDOUBLER and Air China
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TRADEDOUBLER and Air is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Air China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China Limited and TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 Limited has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and Air China go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and Air China
Assuming the 90 days horizon TRADEDOUBLER is expected to generate 5.26 times less return on investment than Air China. But when comparing it to its historical volatility, TRADEDOUBLER AB SK is 1.08 times less risky than Air China. It trades about 0.03 of its potential returns per unit of risk. Air China Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Air China Limited on September 4, 2024 and sell it today you would earn a total of 21.00 from holding Air China Limited or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. Air China Limited
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| Air China Limited |
TRADEDOUBLER and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and Air China
The main advantage of trading using opposite TRADEDOUBLER and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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.| TRADEDOUBLER vs. Superior Plus Corp | TRADEDOUBLER vs. NMI Holdings | TRADEDOUBLER vs. Origin Agritech | TRADEDOUBLER vs. SIVERS SEMICONDUCTORS AB |
| Air China vs. TRADEDOUBLER AB SK | Air China vs. Auto Trader Group | Air China vs. AUTO TRADER ADR | Air China vs. Fast Retailing Co |
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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