Correlation Between China Eastern and Wanhua Chemical
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By analyzing existing cross correlation between China Eastern Airlines and Wanhua Chemical Group, you can compare the effects of market volatilities on China Eastern and Wanhua 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 Wanhua Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Wanhua Chemical.
Diversification Opportunities for China Eastern and Wanhua Chemical
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Wanhua is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Wanhua Chemical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanhua Chemical Group 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 Wanhua Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanhua Chemical Group has no effect on the direction of China Eastern i.e., China Eastern and Wanhua Chemical go up and down completely randomly.
Pair Corralation between China Eastern and Wanhua Chemical
Assuming the 90 days trading horizon China Eastern Airlines is expected to generate 0.9 times more return on investment than Wanhua Chemical. However, China Eastern Airlines is 1.11 times less risky than Wanhua Chemical. It trades about -0.04 of its potential returns per unit of risk. Wanhua Chemical Group is currently generating about -0.04 per unit of risk. If you would invest 540.00 in China Eastern Airlines on October 16, 2024 and sell it today you would lose (146.00) from holding China Eastern Airlines or give up 27.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Eastern Airlines vs. Wanhua Chemical Group
Performance |
| Timeline |
| China Eastern Airlines |
| Wanhua Chemical Group |
China Eastern and Wanhua Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Wanhua Chemical
The main advantage of trading using opposite China Eastern and Wanhua Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Wanhua 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 Wanhua Chemical will offset losses from the drop in Wanhua Chemical's long position.| China Eastern vs. Jiangsu GDK Biotechnology | China Eastern vs. Wuhan Hvsen Biotechnology | China Eastern vs. Guangdong Marubi Biotechnology | China Eastern vs. Guangdong Shenglu Telecommunication |
| Wanhua Chemical vs. Xiamen Jihong Package | Wanhua Chemical vs. Shandong Sanyuan Biotechnology | Wanhua Chemical vs. Shanghai Rightongene Biotechnology | Wanhua Chemical vs. Xiwang Foodstuffs Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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