Correlation Between China Eastern and Shanghai Shibei
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By analyzing existing cross correlation between China Eastern Airlines and Shanghai Shibei Hi Tech, you can compare the effects of market volatilities on China Eastern and Shanghai Shibei 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 Shanghai Shibei. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Shanghai Shibei.
Diversification Opportunities for China Eastern and Shanghai Shibei
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Shanghai Shibei Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Shibei Hi 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 Shanghai Shibei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Shibei Hi has no effect on the direction of China Eastern i.e., China Eastern and Shanghai Shibei go up and down completely randomly.
Pair Corralation between China Eastern and Shanghai Shibei
Assuming the 90 days trading horizon China Eastern Airlines is expected to generate 0.32 times more return on investment than Shanghai Shibei. However, China Eastern Airlines is 3.12 times less risky than Shanghai Shibei. It trades about -0.47 of its potential returns per unit of risk. Shanghai Shibei Hi Tech is currently generating about -0.49 per unit of risk. If you would invest 413.00 in China Eastern Airlines on October 15, 2024 and sell it today you would lose (44.00) from holding China Eastern Airlines or give up 10.65% 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. Shanghai Shibei Hi Tech
Performance |
| Timeline |
| China Eastern Airlines |
| Shanghai Shibei Hi |
China Eastern and Shanghai Shibei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Shanghai Shibei
The main advantage of trading using opposite China Eastern and Shanghai Shibei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Shanghai Shibei 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 Shanghai Shibei will offset losses from the drop in Shanghai Shibei's long position.| China Eastern vs. BYD Co Ltd | China Eastern vs. China Mobile Limited | China Eastern vs. Agricultural Bank of | China Eastern vs. Industrial and Commercial |
| Shanghai Shibei vs. Sichuan Fulin Transportation | Shanghai Shibei vs. COL Digital Publishing | Shanghai Shibei vs. China Eastern Airlines | Shanghai Shibei vs. Duzhe Publishing Media |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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