Correlation Between Hainan Airlines and Fujian Rongji
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By analyzing existing cross correlation between Hainan Airlines Co and Fujian Rongji Software, you can compare the effects of market volatilities on Hainan Airlines and Fujian Rongji 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 Fujian Rongji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Fujian Rongji.
Diversification Opportunities for Hainan Airlines and Fujian Rongji
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Fujian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Fujian Rongji Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Rongji Software 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 Fujian Rongji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Rongji Software has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Fujian Rongji go up and down completely randomly.
Pair Corralation between Hainan Airlines and Fujian Rongji
Assuming the 90 days trading horizon Hainan Airlines is expected to generate 1.53 times less return on investment than Fujian Rongji. But when comparing it to its historical volatility, Hainan Airlines Co is 1.38 times less risky than Fujian Rongji. It trades about 0.05 of its potential returns per unit of risk. Fujian Rongji Software is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 492.00 in Fujian Rongji Software on August 29, 2024 and sell it today you would earn a total of 146.00 from holding Fujian Rongji Software or generate 29.67% 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. Fujian Rongji Software
Performance |
| Timeline |
| Hainan Airlines |
| Fujian Rongji Software |
Hainan Airlines and Fujian Rongji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Fujian Rongji
The main advantage of trading using opposite Hainan Airlines and Fujian Rongji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Fujian Rongji 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 Fujian Rongji will offset losses from the drop in Fujian Rongji's long position.| Hainan Airlines vs. PetroChina Co Ltd | Hainan Airlines vs. China State Construction | Hainan Airlines vs. China Mobile Limited | Hainan Airlines vs. Industrial and Commercial |
| Fujian Rongji vs. China State Construction | Fujian Rongji vs. Huafa Industrial Co | Fujian Rongji vs. China International Capital | Fujian Rongji vs. Kweichow Moutai 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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