Correlation Between Dongfeng Automobile and Hainan Airlines
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By analyzing existing cross correlation between Dongfeng Automobile Co and Hainan Airlines Co, you can compare the effects of market volatilities on Dongfeng Automobile 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 Dongfeng Automobile with a short position of Hainan Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongfeng Automobile and Hainan Airlines.
Diversification Opportunities for Dongfeng Automobile and Hainan Airlines
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongfeng and Hainan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dongfeng Automobile Co and Hainan Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Airlines and Dongfeng Automobile 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 Dongfeng Automobile Co 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 Dongfeng Automobile i.e., Dongfeng Automobile and Hainan Airlines go up and down completely randomly.
Pair Corralation between Dongfeng Automobile and Hainan Airlines
Assuming the 90 days trading horizon Dongfeng Automobile Co is expected to under-perform the Hainan Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Dongfeng Automobile Co is 1.16 times less risky than Hainan Airlines. The stock trades about -0.02 of its potential returns per unit of risk. The Hainan Airlines Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Hainan Airlines Co on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Hainan Airlines Co or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongfeng Automobile Co vs. Hainan Airlines Co
Performance |
| Timeline |
| Dongfeng Automobile |
| Hainan Airlines |
Dongfeng Automobile and Hainan Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongfeng Automobile and Hainan Airlines
The main advantage of trading using opposite Dongfeng Automobile and Hainan Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongfeng Automobile 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.| Dongfeng Automobile vs. Cambricon Technologies Corp | Dongfeng Automobile vs. Loongson Technology Corp | Dongfeng Automobile vs. Shenzhen Fortune Trend | Dongfeng Automobile vs. Chongqing Road Bridge |
| Hainan Airlines vs. Anhui Jianghuai Automobile | Hainan Airlines vs. Linewell Software Co | Hainan Airlines vs. Ningbo Fangzheng Automobile | Hainan Airlines vs. Jiangsu Xinri E Vehicle |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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