Correlation Between Beijing Sanyuan and China Eastern
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By analyzing existing cross correlation between Beijing Sanyuan Foods and China Eastern Airlines, you can compare the effects of market volatilities on Beijing Sanyuan and China Eastern 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 Beijing Sanyuan with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and China Eastern.
Diversification Opportunities for Beijing Sanyuan and China Eastern
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines and Beijing Sanyuan 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 Beijing Sanyuan Foods are associated (or correlated) with China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Beijing Sanyuan i.e., Beijing Sanyuan and China Eastern go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and China Eastern
Assuming the 90 days trading horizon Beijing Sanyuan Foods is expected to generate 1.5 times more return on investment than China Eastern. However, Beijing Sanyuan is 1.5 times more volatile than China Eastern Airlines. It trades about 0.12 of its potential returns per unit of risk. China Eastern Airlines is currently generating about 0.18 per unit of risk. If you would invest 436.00 in Beijing Sanyuan Foods on September 5, 2024 and sell it today you would earn a total of 19.00 from holding Beijing Sanyuan Foods or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. China Eastern Airlines
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| China Eastern Airlines |
Beijing Sanyuan and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and China Eastern
The main advantage of trading using opposite Beijing Sanyuan and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Beijing Sanyuan vs. Xian International Medical | Beijing Sanyuan vs. Xinjiang Zhongtai Chemical | Beijing Sanyuan vs. Xilong Chemical Co | Beijing Sanyuan vs. North Huajin Chemical |
| China Eastern vs. Shandong Sinoglory Health | China Eastern vs. PKU HealthCare Corp | China Eastern vs. Heren Health Co | China Eastern vs. Meinian Onehealth Healthcare |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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