Correlation Between Hainan Airlines and Bank of Changsha
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By analyzing existing cross correlation between Hainan Airlines Co and Bank of Changsha, you can compare the effects of market volatilities on Hainan Airlines and Bank of Changsha 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 Bank of Changsha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Bank of Changsha.
Diversification Opportunities for Hainan Airlines and Bank of Changsha
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Bank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Bank of Changsha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Changsha 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 Bank of Changsha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Changsha has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Bank of Changsha go up and down completely randomly.
Pair Corralation between Hainan Airlines and Bank of Changsha
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 3.1 times more return on investment than Bank of Changsha. However, Hainan Airlines is 3.1 times more volatile than Bank of Changsha. It trades about 0.28 of its potential returns per unit of risk. Bank of Changsha is currently generating about 0.07 per unit of risk. If you would invest 116.00 in Hainan Airlines Co on September 13, 2024 and sell it today you would earn a total of 82.00 from holding Hainan Airlines Co or generate 70.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Bank of Changsha
Performance |
| Timeline |
| Hainan Airlines |
| Bank of Changsha |
Hainan Airlines and Bank of Changsha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Bank of Changsha
The main advantage of trading using opposite Hainan Airlines and Bank of Changsha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Bank of Changsha 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 Bank of Changsha will offset losses from the drop in Bank of Changsha's long position.| Hainan Airlines vs. Aluminum Corp of | Hainan Airlines vs. Rising Nonferrous Metals | Hainan Airlines vs. Dongfeng Automobile Co | Hainan Airlines vs. Xinjiang Communications Construction |
| Bank of Changsha vs. Hainan Airlines Co | Bank of Changsha vs. Shantui Construction Machinery | Bank of Changsha vs. Quectel Wireless Solutions | Bank of Changsha vs. Anhui Huilong Agricultural |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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