Correlation Between China Aircraft and Dine Brands
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Dine Brands 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 Aircraft and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Aircraft Leasing and Dine Brands Global, you can compare the effects of market volatilities on China Aircraft and Dine Brands 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 Aircraft with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Dine Brands.
Diversification Opportunities for China Aircraft and Dine Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Dine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global and China Aircraft 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 Aircraft Leasing are associated (or correlated) with Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of China Aircraft i.e., China Aircraft and Dine Brands go up and down completely randomly.
Pair Corralation between China Aircraft and Dine Brands
Assuming the 90 days horizon China Aircraft Leasing is expected to generate 0.53 times more return on investment than Dine Brands. However, China Aircraft Leasing is 1.9 times less risky than Dine Brands. It trades about -0.02 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.06 per unit of risk. If you would invest 48.00 in China Aircraft Leasing on December 4, 2024 and sell it today you would lose (8.00) from holding China Aircraft Leasing or give up 16.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
China Aircraft Leasing vs. Dine Brands Global
Performance |
Timeline |
China Aircraft Leasing |
Dine Brands Global |
China Aircraft and Dine Brands Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Aircraft and Dine Brands
The main advantage of trading using opposite China Aircraft and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.China Aircraft vs. City Office REIT | China Aircraft vs. Postal Realty Trust | China Aircraft vs. Ryanair Holdings PLC | China Aircraft vs. Aterian |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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