Correlation Between Integral and China Aircraft

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

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

Diversification Opportunities for Integral and China Aircraft

-0.4

Correlation Coefficient

Integral  China Aircraft

Very good diversification

The 3 months correlation between Integral and China is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and China Aircraft go up and down completely randomly.

Pair Corralation between Integral and China Aircraft

Considering the 90-day investment horizon Integral Ad Science is expected to generate 3.14 times more return on investment than China Aircraft. However, Integral is 3.14 times more volatile than China Aircraft Leasing. It trades about -0.01 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about -0.12 per unit of risk. If you would invest  1,100  in Integral Ad Science on September 17, 2024 and sell it today you would lose (42.00) from holding Integral Ad Science or give up 3.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Integral Ad Science  vs.  China Aircraft Leasing

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 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.

Pair Trading with Integral and China Aircraft

The main advantage of trading using opposite Integral and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.