Correlation Between Fujian Rongji and Hainan Airlines
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By analyzing existing cross correlation between Fujian Rongji Software and Hainan Airlines Co, you can compare the effects of market volatilities on Fujian Rongji and Hainan 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 Fujian Rongji with a short position of Hainan Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Rongji and Hainan Airlines.
Diversification Opportunities for Fujian Rongji and Hainan Airlines
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fujian and Hainan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Rongji Software and Hainan Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Airlines and Fujian Rongji 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 Fujian Rongji Software are associated (or correlated) with Hainan Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Airlines has no effect on the direction of Fujian Rongji i.e., Fujian Rongji and Hainan Airlines go up and down completely randomly.
Pair Corralation between Fujian Rongji and Hainan Airlines
Assuming the 90 days trading horizon Fujian Rongji is expected to generate 1.13 times less return on investment than Hainan Airlines. But when comparing it to its historical volatility, Fujian Rongji Software is 1.04 times less risky than Hainan Airlines. It trades about 0.18 of its potential returns per unit of risk. Hainan Airlines Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 105.00 in Hainan Airlines Co on August 29, 2024 and sell it today you would earn a total of 62.00 from holding Hainan Airlines Co or generate 59.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Rongji Software vs. Hainan Airlines Co
Performance |
| Timeline |
| Fujian Rongji Software |
| Hainan Airlines |
Fujian Rongji and Hainan Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Rongji and Hainan Airlines
The main advantage of trading using opposite Fujian Rongji and Hainan Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Rongji position performs unexpectedly, Hainan 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 Hainan Airlines will offset losses from the drop in Hainan Airlines' long position.| Fujian Rongji vs. China State Construction | Fujian Rongji vs. Huafa Industrial Co | Fujian Rongji vs. China International Capital | Fujian Rongji vs. Kweichow Moutai Co |
| Hainan Airlines vs. PetroChina Co Ltd | Hainan Airlines vs. China State Construction | Hainan Airlines vs. China Mobile Limited | Hainan Airlines vs. Industrial and Commercial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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