Correlation Between China Southern and EvoAir Holdings
Can any of the company-specific risk be diversified away by investing in both China Southern and EvoAir Holdings 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 EvoAir Holdings 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 EvoAir Holdings, you can compare the effects of market volatilities on China Southern and EvoAir Holdings 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 EvoAir Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Southern and EvoAir Holdings.
Diversification Opportunities for China Southern and EvoAir Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and EvoAir is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines and EvoAir Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EvoAir Holdings 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 EvoAir Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EvoAir Holdings has no effect on the direction of China Southern i.e., China Southern and EvoAir Holdings go up and down completely randomly.
Pair Corralation between China Southern and EvoAir Holdings
Considering the 90-day investment horizon China Southern Airlines is expected to generate 10.08 times more return on investment than EvoAir Holdings. However, China Southern is 10.08 times more volatile than EvoAir Holdings. It trades about 0.13 of its potential returns per unit of risk. EvoAir Holdings is currently generating about 0.04 per unit of risk. If you would invest 3,312 in China Southern Airlines on September 14, 2024 and sell it today you would earn a total of 385.00 from holding China Southern Airlines or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 9.72% |
| Values | Daily Returns |
China Southern Airlines vs. EvoAir Holdings
Performance |
| Timeline |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EvoAir Holdings |
China Southern and EvoAir Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Southern and EvoAir Holdings
The main advantage of trading using opposite China Southern and EvoAir Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Southern position performs unexpectedly, EvoAir Holdings 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 EvoAir Holdings will offset losses from the drop in EvoAir Holdings' long position.| China Southern vs. EvoAir Holdings | China Southern vs. Westinghouse Air Brake | China Southern vs. Kinetik Holdings | China Southern vs. Cheniere Energy Partners |
| EvoAir Holdings vs. NETGEAR | EvoAir Holdings vs. Radcom | EvoAir Holdings vs. National CineMedia | EvoAir Holdings vs. BCE Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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