Correlation Between Spring Airlines and Hengxin Mobile
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By analyzing existing cross correlation between Spring Airlines Co and Hengxin Mobile Business, you can compare the effects of market volatilities on Spring Airlines and Hengxin Mobile 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 Spring Airlines with a short position of Hengxin Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Airlines and Hengxin Mobile.
Diversification Opportunities for Spring Airlines and Hengxin Mobile
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Spring and Hengxin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Spring Airlines Co and Hengxin Mobile Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengxin Mobile Business and Spring 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 Spring Airlines Co are associated (or correlated) with Hengxin Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengxin Mobile Business has no effect on the direction of Spring Airlines i.e., Spring Airlines and Hengxin Mobile go up and down completely randomly.
Pair Corralation between Spring Airlines and Hengxin Mobile
Assuming the 90 days trading horizon Spring Airlines Co is expected to under-perform the Hengxin Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Spring Airlines Co is 1.99 times less risky than Hengxin Mobile. The stock trades about -0.09 of its potential returns per unit of risk. The Hengxin Mobile Business is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 636.00 in Hengxin Mobile Business on November 7, 2024 and sell it today you would earn a total of 68.00 from holding Hengxin Mobile Business or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spring Airlines Co vs. Hengxin Mobile Business
Performance |
| Timeline |
| Spring Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hengxin Mobile Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Spring Airlines and Hengxin Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Airlines and Hengxin Mobile
The main advantage of trading using opposite Spring Airlines and Hengxin Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Airlines position performs unexpectedly, Hengxin Mobile 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 Hengxin Mobile will offset losses from the drop in Hengxin Mobile's long position.The idea behind Spring Airlines Co and Hengxin Mobile Business pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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