Correlation Between Hainan Airlines and Citic Guoan
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By analyzing existing cross correlation between Hainan Airlines Co and Citic Guoan Wine, you can compare the effects of market volatilities on Hainan Airlines and Citic Guoan 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 Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Citic Guoan.
Diversification Opportunities for Hainan Airlines and Citic Guoan
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Citic is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Citic Guoan Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Guoan Wine 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 Citic Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Guoan Wine has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Citic Guoan go up and down completely randomly.
Pair Corralation between Hainan Airlines and Citic Guoan
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 2.17 times more return on investment than Citic Guoan. However, Hainan Airlines is 2.17 times more volatile than Citic Guoan Wine. It trades about 0.27 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about 0.06 per unit of risk. If you would invest 122.00 in Hainan Airlines Co on August 30, 2024 and sell it today you would earn a total of 48.00 from holding Hainan Airlines Co or generate 39.34% 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. Citic Guoan Wine
Performance |
| Timeline |
| Hainan Airlines |
| Citic Guoan Wine |
Hainan Airlines and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Citic Guoan
The main advantage of trading using opposite Hainan Airlines and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Citic Guoan 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 Citic Guoan will offset losses from the drop in Citic Guoan's long position.| Hainan Airlines vs. Ming Yang Smart | Hainan Airlines vs. 159681 | Hainan Airlines vs. 159005 | Hainan Airlines vs. Loctek Ergonomic Technology |
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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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