Correlation Between China Southern and BRP
Can any of the company-specific risk be diversified away by investing in both China Southern and BRP 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 BRP 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 BRP Inc, you can compare the effects of market volatilities on China Southern and BRP 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 BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Southern and BRP.
Diversification Opportunities for China Southern and BRP
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and BRP is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc 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 BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of China Southern i.e., China Southern and BRP go up and down completely randomly.
Pair Corralation between China Southern and BRP
If you would invest 3,697 in China Southern Airlines on September 5, 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 Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
China Southern Airlines vs. BRP Inc
Performance |
| Timeline |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BRP Inc |
China Southern and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Southern and BRP
The main advantage of trading using opposite China Southern and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Southern position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.| China Southern vs. NETGEAR | China Southern vs. Western Digital | China Southern vs. JetBlue Airways Corp | China Southern vs. Senmiao Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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