Correlation Between China Eastern and Shenyang Chemical
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By analyzing existing cross correlation between China Eastern Airlines and Shenyang Chemical Industry, you can compare the effects of market volatilities on China Eastern and Shenyang Chemical 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 Eastern with a short position of Shenyang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Shenyang Chemical.
Diversification Opportunities for China Eastern and Shenyang Chemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shenyang is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Shenyang Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Chemical and China Eastern 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 Eastern Airlines are associated (or correlated) with Shenyang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Chemical has no effect on the direction of China Eastern i.e., China Eastern and Shenyang Chemical go up and down completely randomly.
Pair Corralation between China Eastern and Shenyang Chemical
Assuming the 90 days trading horizon China Eastern Airlines is expected to under-perform the Shenyang Chemical. But the stock apears to be less risky and, when comparing its historical volatility, China Eastern Airlines is 1.74 times less risky than Shenyang Chemical. The stock trades about -0.04 of its potential returns per unit of risk. The Shenyang Chemical Industry is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 507.00 in Shenyang Chemical Industry on November 2, 2024 and sell it today you would lose (184.00) from holding Shenyang Chemical Industry or give up 36.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Eastern Airlines vs. Shenyang Chemical Industry
Performance |
| Timeline |
| China Eastern Airlines |
| Shenyang Chemical |
China Eastern and Shenyang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Shenyang Chemical
The main advantage of trading using opposite China Eastern and Shenyang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Shenyang Chemical 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 Shenyang Chemical will offset losses from the drop in Shenyang Chemical's long position.| China Eastern vs. Hengli Petrochemical Co | China Eastern vs. Wangneng Environment Co | China Eastern vs. Bsm Chemical Co | China Eastern vs. Lier Chemical Co |
| Shenyang Chemical vs. Fibocom Wireless | Shenyang Chemical vs. Runjian Communication Co | Shenyang Chemical vs. Guangdong Jinma Entertainment | Shenyang Chemical vs. Fiberhome Telecommunication Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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