Correlation Between Eastern Air and CIMC Vehicles
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By analyzing existing cross correlation between Eastern Air Logistics and CIMC Vehicles Co, you can compare the effects of market volatilities on Eastern Air and CIMC Vehicles 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 CIMC Vehicles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Air and CIMC Vehicles.
Diversification Opportunities for Eastern Air and CIMC Vehicles
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and CIMC is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Air Logistics and CIMC Vehicles Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMC Vehicles 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 CIMC Vehicles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMC Vehicles has no effect on the direction of Eastern Air i.e., Eastern Air and CIMC Vehicles go up and down completely randomly.
Pair Corralation between Eastern Air and CIMC Vehicles
Assuming the 90 days trading horizon Eastern Air Logistics is expected to under-perform the CIMC Vehicles. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Air Logistics is 1.15 times less risky than CIMC Vehicles. The stock trades about -0.2 of its potential returns per unit of risk. The CIMC Vehicles Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,006 in CIMC Vehicles Co on August 27, 2024 and sell it today you would lose (26.00) from holding CIMC Vehicles Co or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Air Logistics vs. CIMC Vehicles Co
Performance |
| Timeline |
| Eastern Air Logistics |
| CIMC Vehicles |
Eastern Air and CIMC Vehicles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Air and CIMC Vehicles
The main advantage of trading using opposite Eastern Air and CIMC Vehicles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Air position performs unexpectedly, CIMC Vehicles 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 CIMC Vehicles will offset losses from the drop in CIMC Vehicles' 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 |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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