Correlation Between CHINA SOUTHN and PLAYWAY SA

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

By analyzing existing cross correlation between CHINA SOUTHN AIR H and PLAYWAY SA ZY 10, you can compare the effects of market volatilities on CHINA SOUTHN and PLAYWAY SA 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 SOUTHN with a short position of PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and PLAYWAY SA.

Diversification Opportunities for CHINA SOUTHN and PLAYWAY SA

-0.76

Correlation Coefficient

CHINA SOUTHN  PLAYWAY SA

Pay attention - limited upside

The 3 months correlation between CHINA and PLAYWAY is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H and PLAYWAY SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA ZY and CHINA SOUTHN 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 SOUTHN AIR H are associated (or correlated) with PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA ZY has no effect on the direction of CHINA SOUTHN i.e., CHINA SOUTHN and PLAYWAY SA go up and down completely randomly.

Pair Corralation between CHINA SOUTHN and PLAYWAY SA

Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to generate 1.01 times more return on investment than PLAYWAY SA. However, CHINA SOUTHN is 1.01 times more volatile than PLAYWAY SA ZY 10. It trades about 0.21 of its potential returns per unit of risk. PLAYWAY SA ZY 10 is currently generating about -0.05 per unit of risk. If you would invest  40.00  in CHINA SOUTHN AIR H on September 14, 2025 and sell it today you would earn a total of  16.00  from holding CHINA SOUTHN AIR H or generate 40.0% return on investment over 90 days.

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

CHINA SOUTHN AIR H   vs.  PLAYWAY SA ZY 10

CHINA SOUTHN AIR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA SOUTHN AIR H are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CHINA SOUTHN unveiled solid returns over the last few months and may actually be approaching a breakup point.

PLAYWAY SA ZY

Risk-Adjusted Performance

Weakest

Over the last 90 days PLAYWAY SA ZY 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic 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 CHINA SOUTHN and PLAYWAY SA

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

The idea behind CHINA SOUTHN AIR H and PLAYWAY SA ZY 10 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.