Correlation Between China Aircraft and Integral

Can any of the company-specific risk be diversified away by investing in both China Aircraft and Integral 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 Integral 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 Integral Ad Science, you can compare the effects of market volatilities on China Aircraft and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Integral.

Diversification Opportunities for China Aircraft and Integral

-0.4

Correlation Coefficient

China Aircraft  Integral

Very good diversification

The 3 months correlation between China and Integral is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of China Aircraft i.e., China Aircraft and Integral go up and down completely randomly.

Pair Corralation between China Aircraft and Integral

Assuming the 90 days horizon China Aircraft Leasing is expected to generate 1.25 times more return on investment than Integral. However, China Aircraft is 1.25 times more volatile than Integral Ad Science. It trades about 0.08 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.05 per unit of risk. If you would invest  30.00  in China Aircraft Leasing on September 16, 2024 and sell it today you would earn a total of  10.00  from holding China Aircraft Leasing or generate 33.33% return on investment over 90 days.

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

China Aircraft Leasing  vs.  Integral Ad Science

China Aircraft Leasing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Aircraft Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with China Aircraft and Integral

The main advantage of trading using opposite China Aircraft and Integral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Integral 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 Integral will offset losses from the drop in Integral's long position.

The idea behind China Aircraft Leasing and Integral Ad Science 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.