Correlation Between TravelSky Technology and Air China
Can any of the company-specific risk be diversified away by investing in both TravelSky Technology 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 TravelSky Technology and Air China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TravelSky Technology Ltd and Air China Ltd, you can compare the effects of market volatilities on TravelSky Technology 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 TravelSky Technology with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of TravelSky Technology and Air China.
Diversification Opportunities for TravelSky Technology and Air China
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TravelSky and Air is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding TravelSky Technology Ltd and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and TravelSky Technology 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 TravelSky Technology Ltd 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 has no effect on the direction of TravelSky Technology i.e., TravelSky Technology and Air China go up and down completely randomly.
Pair Corralation between TravelSky Technology and Air China
Assuming the 90 days horizon TravelSky Technology Ltd is expected to under-perform the Air China. In addition to that, TravelSky Technology is 1.09 times more volatile than Air China Ltd. It trades about -0.02 of its total potential returns per unit of risk. Air China Ltd is currently generating about -0.01 per unit of volatility. If you would invest 1,570 in Air China Ltd on August 24, 2024 and sell it today you would lose (320.00) from holding Air China Ltd or give up 20.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TravelSky Technology Ltd vs. Air China Ltd
Performance |
| Timeline |
| TravelSky Technology |
| Air China |
TravelSky Technology and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TravelSky Technology and Air China
The main advantage of trading using opposite TravelSky Technology and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TravelSky Technology 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.| TravelSky Technology vs. Two Hands Corp | TravelSky Technology vs. Visium Technologies | TravelSky Technology vs. Tautachrome | TravelSky Technology vs. V Group |
| Air China vs. easyJet plc | Air China vs. Norse Atlantic ASA | Air China vs. Air New Zealand | Air China vs. Air China Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |