Correlation Between Qantas Airways and China Southern
Can any of the company-specific risk be diversified away by investing in both Qantas Airways 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 Qantas Airways and China Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qantas Airways Limited and China Southern Airlines, you can compare the effects of market volatilities on Qantas Airways 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 Qantas Airways with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qantas Airways and China Southern.
Diversification Opportunities for Qantas Airways and China Southern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Qantas and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Qantas Airways 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 Qantas Airways 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 Qantas Airways 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 Qantas Airways i.e., Qantas Airways and China Southern go up and down completely randomly.
Pair Corralation between Qantas Airways and China Southern
If you would invest 335.00 in Qantas Airways Limited on January 26, 2024 and sell it today you would earn a total of 24.00 from holding Qantas Airways Limited or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Qantas Airways Limited vs. China Southern Airlines
Performance |
| Timeline |
| Qantas Airways |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Qantas Airways and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qantas Airways and China Southern
The main advantage of trading using opposite Qantas Airways and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qantas Airways 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.| Qantas Airways vs. Finnair Oyj | Qantas Airways vs. easyJet plc | Qantas Airways vs. Norse Atlantic ASA | Qantas Airways vs. Air New Zealand |
| China Southern vs. Small Cap Premium | China Southern vs. The Coca Cola | China Southern vs. Diageo PLC ADR | China Southern vs. Constellation Brands Class |
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 CEOs Directory module to screen CEOs from public companies around the world.
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