Correlation Between Hainan Airlines and Shantui Construction
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By analyzing existing cross correlation between Hainan Airlines Co and Shantui Construction Machinery, you can compare the effects of market volatilities on Hainan Airlines and Shantui Construction 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 Hainan Airlines with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Shantui Construction.
Diversification Opportunities for Hainan Airlines and Shantui Construction
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Shantui is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Hainan Airlines 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 Hainan Airlines Co are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Shantui Construction go up and down completely randomly.
Pair Corralation between Hainan Airlines and Shantui Construction
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 1.87 times more return on investment than Shantui Construction. However, Hainan Airlines is 1.87 times more volatile than Shantui Construction Machinery. It trades about 0.23 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.27 per unit of risk. If you would invest 126.00 in Hainan Airlines Co on August 29, 2024 and sell it today you would earn a total of 41.00 from holding Hainan Airlines Co or generate 32.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Shantui Construction Machinery
Performance |
| Timeline |
| Hainan Airlines |
| Shantui Construction |
Hainan Airlines and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Shantui Construction
The main advantage of trading using opposite Hainan Airlines and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Hainan Airlines vs. BYD Co Ltd | Hainan Airlines vs. China Mobile Limited | Hainan Airlines vs. Agricultural Bank of | Hainan Airlines vs. Industrial and Commercial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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