Correlation Between Hainan Airlines and Shandong Mining
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By analyzing existing cross correlation between Hainan Airlines Co and Shandong Mining Machinery, you can compare the effects of market volatilities on Hainan Airlines and Shandong Mining 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 Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Shandong Mining.
Diversification Opportunities for Hainan Airlines and Shandong Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery 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 Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Shandong Mining go up and down completely randomly.
Pair Corralation between Hainan Airlines and Shandong Mining
Assuming the 90 days trading horizon Hainan Airlines is expected to generate 3.32 times less return on investment than Shandong Mining. But when comparing it to its historical volatility, Hainan Airlines Co is 1.22 times less risky than Shandong Mining. It trades about 0.01 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Shandong Mining Machinery on August 29, 2024 and sell it today you would earn a total of 34.00 from holding Shandong Mining Machinery or generate 14.41% 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. Shandong Mining Machinery
Performance |
| Timeline |
| Hainan Airlines |
| Shandong Mining Machinery |
Hainan Airlines and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Shandong Mining
The main advantage of trading using opposite Hainan Airlines and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Shandong Mining 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 Shandong Mining will offset losses from the drop in Shandong Mining'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 |
| Shandong Mining vs. Runjian Communication Co | Shandong Mining vs. GreenTech Environmental Co | Shandong Mining vs. Tongyu Communication | Shandong Mining vs. Guangzhou Haige Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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