Correlation Between Anhui Jianghuai and Eastern Air
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By analyzing existing cross correlation between Anhui Jianghuai Automobile and Eastern Air Logistics, you can compare the effects of market volatilities on Anhui Jianghuai and Eastern Air 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 Anhui Jianghuai with a short position of Eastern Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Jianghuai and Eastern Air.
Diversification Opportunities for Anhui Jianghuai and Eastern Air
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Eastern is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Jianghuai Automobile and Eastern Air Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Air Logistics and Anhui Jianghuai 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 Anhui Jianghuai Automobile are associated (or correlated) with Eastern Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Air Logistics has no effect on the direction of Anhui Jianghuai i.e., Anhui Jianghuai and Eastern Air go up and down completely randomly.
Pair Corralation between Anhui Jianghuai and Eastern Air
Assuming the 90 days trading horizon Anhui Jianghuai Automobile is expected to generate 2.72 times more return on investment than Eastern Air. However, Anhui Jianghuai is 2.72 times more volatile than Eastern Air Logistics. It trades about 0.14 of its potential returns per unit of risk. Eastern Air Logistics is currently generating about -0.2 per unit of risk. If you would invest 3,455 in Anhui Jianghuai Automobile on August 27, 2024 and sell it today you would earn a total of 430.00 from holding Anhui Jianghuai Automobile or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anhui Jianghuai Automobile vs. Eastern Air Logistics
Performance |
| Timeline |
| Anhui Jianghuai Auto |
| Eastern Air Logistics |
Anhui Jianghuai and Eastern Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Jianghuai and Eastern Air
The main advantage of trading using opposite Anhui Jianghuai and Eastern Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Jianghuai position performs unexpectedly, Eastern Air 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 Eastern Air will offset losses from the drop in Eastern Air's long position.| Anhui Jianghuai vs. Lutian Machinery Co | Anhui Jianghuai vs. China Longyuan Power | Anhui Jianghuai vs. Changshu Tongrun Auto | Anhui Jianghuai vs. PetroChina Co Ltd |
| Eastern Air vs. China Life Insurance | Eastern Air vs. Piotech Inc A | Eastern Air vs. Dongxing Sec Co | Eastern Air vs. Shanghai OPM Biosciences |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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