Correlation Between AIR CHINA and Aeon Co
Can any of the company-specific risk be diversified away by investing in both AIR CHINA and Aeon Co 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 AIR CHINA and Aeon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR CHINA LTD and Aeon Co, you can compare the effects of market volatilities on AIR CHINA and Aeon Co 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 AIR CHINA with a short position of Aeon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR CHINA and Aeon Co.
Diversification Opportunities for AIR CHINA and Aeon Co
Very poor diversification
The 3 months correlation between AIR and Aeon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AIR CHINA LTD and Aeon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Co and AIR CHINA 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 AIR CHINA LTD are associated (or correlated) with Aeon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Co has no effect on the direction of AIR CHINA i.e., AIR CHINA and Aeon Co go up and down completely randomly.
Pair Corralation between AIR CHINA and Aeon Co
Assuming the 90 days trading horizon AIR CHINA is expected to generate 10.8 times less return on investment than Aeon Co. But when comparing it to its historical volatility, AIR CHINA LTD is 1.51 times less risky than Aeon Co. It trades about 0.03 of its potential returns per unit of risk. Aeon Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,270 in Aeon Co on September 7, 2025 and sell it today you would earn a total of 170.00 from holding Aeon Co or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR CHINA LTD vs. Aeon Co
Performance |
| Timeline |
| AIR CHINA LTD |
| Aeon Co |
AIR CHINA and Aeon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR CHINA and Aeon Co
The main advantage of trading using opposite AIR CHINA and Aeon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR CHINA position performs unexpectedly, Aeon Co 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 Aeon Co will offset losses from the drop in Aeon Co's long position.| AIR CHINA vs. Zhaojin Mining Industry | AIR CHINA vs. ARDAGH METAL PACDL 0001 | AIR CHINA vs. SCANSOURCE | AIR CHINA vs. Perseus Mining Limited |
| Aeon Co vs. Harmony Gold Mining | Aeon Co vs. NAGOYA RAILROAD | Aeon Co vs. BROADSTNET LEADL 00025 | Aeon Co vs. Globex Mining Enterprises |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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