Correlation Between 532457BT4 and China Aircraft

Can any of the company-specific risk be diversified away by investing in both 532457BT4 and China Aircraft 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 532457BT4 and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ELI LILLY AND and China Aircraft Leasing, you can compare the effects of market volatilities on 532457BT4 and China Aircraft 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 532457BT4 with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of 532457BT4 and China Aircraft.

Diversification Opportunities for 532457BT4 and China Aircraft

0.57

Correlation Coefficient

532457BT4  China Aircraft

Very weak diversification

The 3 months correlation between 532457BT4 and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ELI LILLY AND and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing and 532457BT4 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 ELI LILLY AND are associated (or correlated) with China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of 532457BT4 i.e., 532457BT4 and China Aircraft go up and down completely randomly.

Pair Corralation between 532457BT4 and China Aircraft

Assuming the 90 days trading horizon ELI LILLY AND is expected to under-perform the China Aircraft. But the bond apears to be less risky and, when comparing its historical volatility, ELI LILLY AND is 1.6 times less risky than China Aircraft. The bond trades about -0.03 of its potential returns per unit of risk. The China Aircraft Leasing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  29.00  in China Aircraft Leasing on October 13, 2024 and sell it today you would earn a total of  11.00  from holding China Aircraft Leasing or generate 37.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.01%
Values	Daily Returns

ELI LILLY AND  vs.  China Aircraft Leasing

ELI LILLY AND

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days ELI LILLY AND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ELI LILLY AND investors.

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 weak 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.

Pair Trading with 532457BT4 and China Aircraft

The main advantage of trading using opposite 532457BT4 and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 532457BT4 position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.

The idea behind ELI LILLY AND and China Aircraft Leasing 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.