Correlation Between Hainan Airlines and Xilinmen Furniture
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By analyzing existing cross correlation between Hainan Airlines Co and Xilinmen Furniture Co, you can compare the effects of market volatilities on Hainan Airlines and Xilinmen Furniture 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 Xilinmen Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Xilinmen Furniture.
Diversification Opportunities for Hainan Airlines and Xilinmen Furniture
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Xilinmen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Xilinmen Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilinmen Furniture 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 Xilinmen Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilinmen Furniture has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Xilinmen Furniture go up and down completely randomly.
Pair Corralation between Hainan Airlines and Xilinmen Furniture
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 1.07 times more return on investment than Xilinmen Furniture. However, Hainan Airlines is 1.07 times more volatile than Xilinmen Furniture Co. It trades about 0.05 of its potential returns per unit of risk. Xilinmen Furniture Co is currently generating about 0.01 per unit of risk. If you would invest 147.00 in Hainan Airlines Co on September 14, 2024 and sell it today you would earn a total of 46.00 from holding Hainan Airlines Co or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Hainan Airlines Co vs. Xilinmen Furniture Co
Performance |
| Timeline |
| Hainan Airlines |
| Xilinmen Furniture |
Hainan Airlines and Xilinmen Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Xilinmen Furniture
The main advantage of trading using opposite Hainan Airlines and Xilinmen Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Xilinmen Furniture 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 Xilinmen Furniture will offset losses from the drop in Xilinmen Furniture's long position.| Hainan Airlines vs. Anhui Jianghuai Automobile | Hainan Airlines vs. Linewell Software Co | Hainan Airlines vs. Ningbo Fangzheng Automobile | Hainan Airlines vs. Jiangsu Xinri E Vehicle |
| Xilinmen Furniture vs. Western Metal Materials | Xilinmen Furniture vs. Xinjiang Communications Construction | Xilinmen Furniture vs. Guangdong Qunxing Toys | Xilinmen Furniture vs. Hainan Airlines 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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