Correlation Between CHINA SOUTHN and ALTAIR RES
Can any of the company-specific risk be diversified away by investing in both CHINA SOUTHN and ALTAIR RES 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 ALTAIR RES 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 ALTAIR RES INC, you can compare the effects of market volatilities on CHINA SOUTHN and ALTAIR RES 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 ALTAIR RES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and ALTAIR RES.
Diversification Opportunities for CHINA SOUTHN and ALTAIR RES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and ALTAIR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H and ALTAIR RES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTAIR RES INC 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 ALTAIR RES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTAIR RES INC has no effect on the direction of CHINA SOUTHN i.e., CHINA SOUTHN and ALTAIR RES go up and down completely randomly.
Pair Corralation between CHINA SOUTHN and ALTAIR RES
Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to under-perform the ALTAIR RES. But the stock apears to be less risky and, when comparing its historical volatility, CHINA SOUTHN AIR H is 18.0 times less risky than ALTAIR RES. The stock trades about -0.01 of its potential returns per unit of risk. The ALTAIR RES INC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.75 in ALTAIR RES INC on October 11, 2024 and sell it today you would lose (0.70) from holding ALTAIR RES INC or give up 93.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
CHINA SOUTHN AIR H vs. ALTAIR RES INC
Performance |
Timeline |
CHINA SOUTHN AIR |
ALTAIR RES INC |
CHINA SOUTHN and ALTAIR RES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CHINA SOUTHN and ALTAIR RES
The main advantage of trading using opposite CHINA SOUTHN and ALTAIR RES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA SOUTHN position performs unexpectedly, ALTAIR RES 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 ALTAIR RES will offset losses from the drop in ALTAIR RES's long position.CHINA SOUTHN vs. SCOTT TECHNOLOGY | CHINA SOUTHN vs. Firan Technology Group | CHINA SOUTHN vs. Micron Technology | CHINA SOUTHN vs. PACIFIC ONLINE |
ALTAIR RES vs. Geely Automobile Holdings | ALTAIR RES vs. TITAN MACHINERY | ALTAIR RES vs. Cars Inc | ALTAIR RES vs. Scandinavian Tobacco Group |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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