Correlation Between CHINA SOUTHN and Aya Gold

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

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

Diversification Opportunities for CHINA SOUTHN and Aya Gold

-0.86

Correlation Coefficient

CHINA SOUTHN  Aya Gold

Pay attention - limited upside

The 3 months correlation between CHINA and Aya is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver and CHINA SOUTHN 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 SOUTHN AIR H are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of CHINA SOUTHN i.e., CHINA SOUTHN and Aya Gold go up and down completely randomly.

Pair Corralation between CHINA SOUTHN and Aya Gold

Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to under-perform the Aya Gold. But the stock apears to be less risky and, when comparing its historical volatility, CHINA SOUTHN AIR H is 1.02 times less risky than Aya Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Aya Gold Silver is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  582.00  in Aya Gold Silver on October 11, 2024 and sell it today you would earn a total of  164.00  from holding Aya Gold Silver or generate 28.18% return on investment over 90 days.

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

CHINA SOUTHN AIR H   vs.  Aya Gold Silver

CHINA SOUTHN AIR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA SOUTHN AIR H are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CHINA SOUTHN unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CHINA SOUTHN and Aya Gold

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

The idea behind CHINA SOUTHN AIR H and Aya Gold Silver 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.