Correlation Between Shandong Longquan and China Eastern
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By analyzing existing cross correlation between Shandong Longquan Pipeline and China Eastern Airlines, you can compare the effects of market volatilities on Shandong Longquan and China Eastern 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 Shandong Longquan with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and China Eastern.
Diversification Opportunities for Shandong Longquan and China Eastern
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines and Shandong Longquan 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 Shandong Longquan Pipeline are associated (or correlated) with China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Shandong Longquan i.e., Shandong Longquan and China Eastern go up and down completely randomly.
Pair Corralation between Shandong Longquan and China Eastern
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 1.63 times more return on investment than China Eastern. However, Shandong Longquan is 1.63 times more volatile than China Eastern Airlines. It trades about 0.21 of its potential returns per unit of risk. China Eastern Airlines is currently generating about 0.16 per unit of risk. If you would invest 351.00 in Shandong Longquan Pipeline on September 12, 2024 and sell it today you would earn a total of 154.00 from holding Shandong Longquan Pipeline or generate 43.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. China Eastern Airlines
Performance |
| Timeline |
| Shandong Longquan |
| China Eastern Airlines |
Shandong Longquan and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and China Eastern
The main advantage of trading using opposite Shandong Longquan and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan position performs unexpectedly, China Eastern 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 Eastern will offset losses from the drop in China Eastern's long position.| Shandong Longquan vs. Zijin Mining Group | Shandong Longquan vs. Wanhua Chemical Group | Shandong Longquan vs. Baoshan Iron Steel | Shandong Longquan vs. Shandong Gold Mining |
| China Eastern vs. Anhui Transport Consulting | China Eastern vs. Suzhou Douson Drilling | China Eastern vs. Chengdu Spaceon Electronics | China Eastern vs. Guangdong Jingyi Metal |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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