Correlation Between ATRYS HEALTH and AIR CHINA

Can any of the company-specific risk be diversified away by investing in both ATRYS HEALTH 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 ATRYS HEALTH and AIR CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATRYS HEALTH SA and AIR CHINA LTD, you can compare the effects of market volatilities on ATRYS HEALTH 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 ATRYS HEALTH with a short position of AIR CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRYS HEALTH and AIR CHINA.

Diversification Opportunities for ATRYS HEALTH and AIR CHINA

-0.47

Correlation Coefficient

ATRYS HEALTH  AIR CHINA

Very good diversification

The 3 months correlation between ATRYS and AIR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ATRYS HEALTH SA and AIR CHINA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR CHINA LTD and ATRYS HEALTH 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 ATRYS HEALTH SA 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 LTD has no effect on the direction of ATRYS HEALTH i.e., ATRYS HEALTH and AIR CHINA go up and down completely randomly.

Pair Corralation between ATRYS HEALTH and AIR CHINA

Assuming the 90 days horizon ATRYS HEALTH is expected to generate 1.11 times less return on investment than AIR CHINA. But when comparing it to its historical volatility, ATRYS HEALTH SA is 1.11 times less risky than AIR CHINA. It trades about 0.11 of its potential returns per unit of risk. AIR CHINA LTD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,040  in AIR CHINA LTD on October 6, 2024 and sell it today you would earn a total of  130.00  from holding AIR CHINA LTD or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ATRYS HEALTH SA  vs.  AIR CHINA LTD

ATRYS HEALTH SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ATRYS HEALTH SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ATRYS HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AIR CHINA LTD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AIR CHINA LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, AIR CHINA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATRYS HEALTH and AIR CHINA

The main advantage of trading using opposite ATRYS HEALTH and AIR CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRYS HEALTH 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.

The idea behind ATRYS HEALTH SA and AIR CHINA LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.