Correlation Between Changchun and Spring Airlines
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By analyzing existing cross correlation between Changchun UP Optotech and Spring Airlines Co, you can compare the effects of market volatilities on Changchun and Spring Airlines 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 Changchun with a short position of Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Spring Airlines.
Diversification Opportunities for Changchun and Spring Airlines
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Changchun and Spring is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines and Changchun 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 Changchun UP Optotech are associated (or correlated) with Spring Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Airlines has no effect on the direction of Changchun i.e., Changchun and Spring Airlines go up and down completely randomly.
Pair Corralation between Changchun and Spring Airlines
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.8 times more return on investment than Spring Airlines. However, Changchun is 1.8 times more volatile than Spring Airlines Co. It trades about 0.14 of its potential returns per unit of risk. Spring Airlines Co is currently generating about 0.08 per unit of risk. If you would invest 2,670 in Changchun UP Optotech on October 18, 2024 and sell it today you would earn a total of 1,223 from holding Changchun UP Optotech or generate 45.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Spring Airlines Co
Performance |
| Timeline |
| Changchun UP Optotech |
| Spring Airlines |
Changchun and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Spring Airlines
The main advantage of trading using opposite Changchun and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Spring Airlines 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 Spring Airlines will offset losses from the drop in Spring Airlines' long position.| Changchun vs. Tieling Newcity Investment | Changchun vs. Hubei Geoway Investment | Changchun vs. GUOMAI Culture Media | Changchun vs. Vanfund Urban Investment |
| Spring Airlines vs. HanS Laser Tech | Spring Airlines vs. Citic Guoan Wine | Spring Airlines vs. Hubei Xingfa Chemicals | Spring Airlines vs. Changchun UP Optotech |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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