Correlation Between Eastern Air and Chengdu Xinzhu
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By analyzing existing cross correlation between Eastern Air Logistics and Chengdu Xinzhu RoadBridge, you can compare the effects of market volatilities on Eastern Air and Chengdu Xinzhu 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 Chengdu Xinzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Air and Chengdu Xinzhu.
Diversification Opportunities for Eastern Air and Chengdu Xinzhu
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Chengdu is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Air Logistics and Chengdu Xinzhu RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xinzhu RoadBridge 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 Chengdu Xinzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xinzhu RoadBridge has no effect on the direction of Eastern Air i.e., Eastern Air and Chengdu Xinzhu go up and down completely randomly.
Pair Corralation between Eastern Air and Chengdu Xinzhu
Assuming the 90 days trading horizon Eastern Air Logistics is expected to under-perform the Chengdu Xinzhu. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Air Logistics is 1.41 times less risky than Chengdu Xinzhu. The stock trades about -0.27 of its potential returns per unit of risk. The Chengdu Xinzhu RoadBridge is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 502.00 in Chengdu Xinzhu RoadBridge on August 29, 2024 and sell it today you would lose (11.00) from holding Chengdu Xinzhu RoadBridge or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Air Logistics vs. Chengdu Xinzhu RoadBridge
Performance |
| Timeline |
| Eastern Air Logistics |
| Chengdu Xinzhu RoadBridge |
Eastern Air and Chengdu Xinzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Air and Chengdu Xinzhu
The main advantage of trading using opposite Eastern Air and Chengdu Xinzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Air position performs unexpectedly, Chengdu Xinzhu 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 Chengdu Xinzhu will offset losses from the drop in Chengdu Xinzhu's long position.| Eastern Air vs. Ningbo Bohui Chemical | Eastern Air vs. Hangzhou Pinming Software | Eastern Air vs. Nantong Jiangshan Agrochemical | Eastern Air vs. Ningxia Younglight Chemicals |
| Chengdu Xinzhu vs. Guangdong Marubi Biotechnology | Chengdu Xinzhu vs. Xinjiang Baodi Mining | Chengdu Xinzhu vs. Everdisplay Optronics Shanghai | Chengdu Xinzhu vs. Hainan Mining 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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