Correlation Between China Aircraft and Inflection Point
Can any of the company-specific risk be diversified away by investing in both China Aircraft and Inflection Point 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 Inflection Point 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 Inflection Point Acquisition, you can compare the effects of market volatilities on China Aircraft and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Aircraft and Inflection Point.
Diversification Opportunities for China Aircraft and Inflection Point
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Inflection is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of China Aircraft i.e., China Aircraft and Inflection Point go up and down completely randomly.
Pair Corralation between China Aircraft and Inflection Point
Assuming the 90 days horizon China Aircraft is expected to generate 9.02 times less return on investment than Inflection Point. But when comparing it to its historical volatility, China Aircraft Leasing is 13.16 times less risky than Inflection Point. It trades about 0.08 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Inflection Point Acquisition on September 24, 2024 and sell it today you would earn a total of 1,335 from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 80.48% |
Values | Daily Returns |
China Aircraft Leasing vs. Inflection Point Acquisition
Performance |
Timeline |
China Aircraft Leasing |
Inflection Point Acq |
China Aircraft and Inflection Point Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Aircraft and Inflection Point
The main advantage of trading using opposite China Aircraft and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Aircraft position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.China Aircraft vs. Black Diamond Group | China Aircraft vs. Alta Equipment Group | China Aircraft vs. BOC Aviation Limited | China Aircraft vs. Fortress Transportation and |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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