Correlation Between Hainan Airlines and Lingyuan Iron
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By analyzing existing cross correlation between Hainan Airlines Co and Lingyuan Iron Steel, you can compare the effects of market volatilities on Hainan Airlines and Lingyuan Iron 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 Lingyuan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Lingyuan Iron.
Diversification Opportunities for Hainan Airlines and Lingyuan Iron
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Lingyuan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Lingyuan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingyuan Iron Steel 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 Lingyuan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingyuan Iron Steel has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Lingyuan Iron go up and down completely randomly.
Pair Corralation between Hainan Airlines and Lingyuan Iron
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 0.98 times more return on investment than Lingyuan Iron. However, Hainan Airlines Co is 1.02 times less risky than Lingyuan Iron. It trades about 0.0 of its potential returns per unit of risk. Lingyuan Iron Steel is currently generating about 0.0 per unit of risk. If you would invest 188.00 in Hainan Airlines Co on August 30, 2024 and sell it today you would lose (11.00) from holding Hainan Airlines Co or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Lingyuan Iron Steel
Performance |
| Timeline |
| Hainan Airlines |
| Lingyuan Iron Steel |
Hainan Airlines and Lingyuan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Lingyuan Iron
The main advantage of trading using opposite Hainan Airlines and Lingyuan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Lingyuan Iron 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 Lingyuan Iron will offset losses from the drop in Lingyuan Iron'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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