Correlation Between CARYSIL and China Southern

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

By analyzing existing cross correlation between CARYSIL LIMITED and China Southern Airlines, you can compare the effects of market volatilities on CARYSIL and China Southern 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 CARYSIL with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARYSIL and China Southern.

Diversification Opportunities for CARYSIL and China Southern

-0.17

Correlation Coefficient

CARYSIL  China Southern

Good diversification

The 3 months correlation between CARYSIL and China is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CARYSIL LIMITED and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines and CARYSIL 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 CARYSIL LIMITED are associated (or correlated) with China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of CARYSIL i.e., CARYSIL and China Southern go up and down completely randomly.

Pair Corralation between CARYSIL and China Southern

If you would invest  3,697  in China Southern Airlines on February 6, 2024 and sell it today you would earn a total of  0.00  from holding China Southern Airlines or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

CARYSIL LIMITED  vs.  China Southern Airlines

CARYSIL LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARYSIL LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

China Southern Airlines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Southern Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, China Southern is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CARYSIL and China Southern

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

The idea behind CARYSIL LIMITED and China Southern Airlines 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.