Correlation Between Eastern Air and Guangdong Advertising
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By analyzing existing cross correlation between Eastern Air Logistics and Guangdong Advertising Co, you can compare the effects of market volatilities on Eastern Air and Guangdong Advertising 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 Eastern Air with a short position of Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Air and Guangdong Advertising.
Diversification Opportunities for Eastern Air and Guangdong Advertising
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Guangdong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Air Logistics and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising and Eastern Air 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 Eastern Air Logistics are associated (or correlated) with Guangdong Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Advertising has no effect on the direction of Eastern Air i.e., Eastern Air and Guangdong Advertising go up and down completely randomly.
Pair Corralation between Eastern Air and Guangdong Advertising
Assuming the 90 days trading horizon Eastern Air Logistics is expected to under-perform the Guangdong Advertising. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Air Logistics is 3.37 times less risky than Guangdong Advertising. The stock trades about -0.2 of its potential returns per unit of risk. The Guangdong Advertising Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 620.00 in Guangdong Advertising Co on August 27, 2024 and sell it today you would earn a total of 178.00 from holding Guangdong Advertising Co or generate 28.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Air Logistics vs. Guangdong Advertising Co
Performance |
| Timeline |
| Eastern Air Logistics |
| Guangdong Advertising |
Eastern Air and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Air and Guangdong Advertising
The main advantage of trading using opposite Eastern Air and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Air position performs unexpectedly, Guangdong Advertising 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 Guangdong Advertising will offset losses from the drop in Guangdong Advertising's long position.| Eastern Air vs. China Life Insurance | Eastern Air vs. Piotech Inc A | Eastern Air vs. Dongxing Sec Co | Eastern Air vs. Shanghai OPM Biosciences |
| Guangdong Advertising vs. Industrial and Commercial | Guangdong Advertising vs. Agricultural Bank of | Guangdong Advertising vs. China Construction Bank | Guangdong Advertising vs. Bank of China |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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