Correlation Between China Vanke and China Southern
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By analyzing existing cross correlation between China Vanke Co and China Southern Airlines, you can compare the effects of market volatilities on China Vanke 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 China Vanke with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and China Southern.
Diversification Opportunities for China Vanke and China Southern
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co 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 China Vanke 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 Vanke Co 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 China Vanke i.e., China Vanke and China Southern go up and down completely randomly.
Pair Corralation between China Vanke and China Southern
Assuming the 90 days trading horizon China Vanke Co is expected to under-perform the China Southern. In addition to that, China Vanke is 1.72 times more volatile than China Southern Airlines. It trades about -0.01 of its total potential returns per unit of risk. China Southern Airlines is currently generating about 0.06 per unit of volatility. If you would invest 576.00 in China Southern Airlines on September 14, 2024 and sell it today you would earn a total of 143.00 from holding China Southern Airlines or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
China Vanke Co vs. China Southern Airlines
Performance |
| Timeline |
| China Vanke |
| China Southern Airlines |
China Vanke and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Vanke and China Southern
The main advantage of trading using opposite China Vanke and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Vanke 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.| China Vanke vs. Qinghaihuading Industrial Co | China Vanke vs. Sichuan Yahua Industrial | China Vanke vs. Qingdao Choho Industrial | China Vanke vs. Suzhou Douson Drilling |
| China Southern vs. China State Construction | China Southern vs. Poly Real Estate | China Southern vs. China Vanke Co | China Southern vs. China Merchants Shekou |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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