Correlation Between China Aircraft and Vestis

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

Diversification Opportunities for China Aircraft and Vestis

0.01

Correlation Coefficient

China Aircraft  Vestis

Significant diversification

The 3 months correlation between China and Vestis is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Aircraft Leasing and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of China Aircraft i.e., China Aircraft and Vestis go up and down completely randomly.

Pair Corralation between China Aircraft and Vestis

If you would invest  1,328  in Vestis on September 21, 2024 and sell it today you would earn a total of  311.00  from holding Vestis or generate 23.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

China Aircraft Leasing  vs.  Vestis

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.

Vestis

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vestis are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Vestis may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with China Aircraft and Vestis

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

The idea behind China Aircraft Leasing and Vestis 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.