Correlation Between Air China and Agricultural Bank
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By analyzing existing cross correlation between Air China Ltd and Agricultural Bank of, you can compare the effects of market volatilities on Air China and Agricultural Bank 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 Air China with a short position of Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Agricultural Bank.
Diversification Opportunities for Air China and Agricultural Bank
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Agricultural is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank and Air China 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 Air China Ltd are associated (or correlated) with Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Air China i.e., Air China and Agricultural Bank go up and down completely randomly.
Pair Corralation between Air China and Agricultural Bank
Assuming the 90 days trading horizon Air China Ltd is expected to generate 1.62 times more return on investment than Agricultural Bank. However, Air China is 1.62 times more volatile than Agricultural Bank of. It trades about 0.21 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.1 per unit of risk. If you would invest 656.00 in Air China Ltd on September 10, 2024 and sell it today you would earn a total of 213.00 from holding Air China Ltd or generate 32.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air China Ltd vs. Agricultural Bank of
Performance |
Timeline |
Air China |
Agricultural Bank |
Air China and Agricultural Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air China and Agricultural Bank
The main advantage of trading using opposite Air China and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank's long position.Air China vs. Jiajia Food Group | Air China vs. Zhuhai Comleader Information | Air China vs. Ligao Foods CoLtd | Air China vs. Northking Information Technology |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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