Correlation Between China Southern and Integral

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

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

Diversification Opportunities for China Southern and Integral

-0.03

Correlation Coefficient

China Southern  Integral

Good diversification

The 3 months correlation between China and Integral is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science and China Southern 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 Southern Airlines are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of China Southern i.e., China Southern and Integral go up and down completely randomly.

Pair Corralation between China Southern and Integral

Assuming the 90 days horizon China Southern Airlines is expected to generate 3.24 times more return on investment than Integral. However, China Southern is 3.24 times more volatile than Integral Ad Science. It trades about 0.09 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.07 per unit of risk. If you would invest  41.00  in China Southern Airlines on May 6, 2025 and sell it today you would earn a total of  11.00  from holding China Southern Airlines or generate 26.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

China Southern Airlines  vs.  Integral Ad Science

China Southern Airlines

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Southern Airlines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, China Southern reported solid returns over the last few months and may actually be approaching a breakup point.

Integral Ad Science

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Integral may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with China Southern and Integral

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

The idea behind China Southern Airlines and Integral Ad Science 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.