Correlation Between China Eastern and Sichuan Hebang
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By analyzing existing cross correlation between China Eastern Airlines and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on China Eastern and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Sichuan Hebang.
Diversification Opportunities for China Eastern and Sichuan Hebang
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sichuan is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of China Eastern i.e., China Eastern and Sichuan Hebang go up and down completely randomly.
Pair Corralation between China Eastern and Sichuan Hebang
Assuming the 90 days trading horizon China Eastern Airlines is expected to generate 0.83 times more return on investment than Sichuan Hebang. However, China Eastern Airlines is 1.2 times less risky than Sichuan Hebang. It trades about -0.05 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.06 per unit of risk. If you would invest 408.00 in China Eastern Airlines on October 30, 2024 and sell it today you would lose (20.00) from holding China Eastern Airlines or give up 4.9% 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. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| China Eastern Airlines |
| Sichuan Hebang Biote |
China Eastern and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Sichuan Hebang
The main advantage of trading using opposite China Eastern and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| China Eastern vs. Ningbo Tip Rubber | China Eastern vs. Jiangnan Mould Plastic | China Eastern vs. Nanya New Material | China Eastern vs. Hengerda New Materials |
| Sichuan Hebang vs. Xiangtan Electrochemical Scientific | Sichuan Hebang vs. Liaoning Dingjide Petrochemical | Sichuan Hebang vs. Hengli Petrochemical Co | Sichuan Hebang vs. Jilin Jlu Communication |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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