Correlation Between China Southern and Avis Budget
Can any of the company-specific risk be diversified away by investing in both China Southern and Avis Budget 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 China Southern and Avis Budget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Southern Airlines and Avis Budget Group, you can compare the effects of market volatilities on China Southern and Avis Budget 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 China Southern with a short position of Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Southern and Avis Budget.
Diversification Opportunities for China Southern and Avis Budget
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Avis is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group and China Southern 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 China Southern Airlines are associated (or correlated) with Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of China Southern i.e., China Southern and Avis Budget go up and down completely randomly.
Pair Corralation between China Southern and Avis Budget
If you would invest 3,697 in China Southern Airlines on September 12, 2024 and sell it today you would earn a total of 0.00 from holding China Southern Airlines or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.28% |
| Values | Daily Returns |
China Southern Airlines vs. Avis Budget Group
Performance |
| Timeline |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Avis Budget Group |
China Southern and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Southern and Avis Budget
The main advantage of trading using opposite China Southern and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Southern position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget's long position.| China Southern vs. Zhihu Inc ADR | China Southern vs. Integral Ad Science | China Southern vs. Pinterest | China Southern vs. Analog Devices |
| Avis Budget vs. Hertz Global Hldgs | Avis Budget vs. Ryder System | Avis Budget vs. HE Equipment Services | Avis Budget vs. United Rentals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |