Correlation Between Eastern Air and Shanghai Bailian
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By analyzing existing cross correlation between Eastern Air Logistics and Shanghai Bailian Group, you can compare the effects of market volatilities on Eastern Air and Shanghai Bailian 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 Shanghai Bailian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Air and Shanghai Bailian.
Diversification Opportunities for Eastern Air and Shanghai Bailian
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Shanghai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Air Logistics and Shanghai Bailian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Bailian 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 Shanghai Bailian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Bailian has no effect on the direction of Eastern Air i.e., Eastern Air and Shanghai Bailian go up and down completely randomly.
Pair Corralation between Eastern Air and Shanghai Bailian
Assuming the 90 days trading horizon Eastern Air Logistics is expected to under-perform the Shanghai Bailian. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Air Logistics is 1.04 times less risky than Shanghai Bailian. The stock trades about -0.05 of its potential returns per unit of risk. The Shanghai Bailian Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Shanghai Bailian Group on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Shanghai Bailian Group or generate 77.5% 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. Shanghai Bailian Group
Performance |
| Timeline |
| Eastern Air Logistics |
| Shanghai Bailian |
Eastern Air and Shanghai Bailian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Air and Shanghai Bailian
The main advantage of trading using opposite Eastern Air and Shanghai Bailian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Air position performs unexpectedly, Shanghai Bailian 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 Shanghai Bailian will offset losses from the drop in Shanghai Bailian's long position.| Eastern Air vs. Fiberhome Telecommunication Technologies | Eastern Air vs. Ningbo Tech Bank Co | Eastern Air vs. Unisplendour Corp | Eastern Air vs. China Construction Bank |
| Shanghai Bailian vs. Inspur Software Co | Shanghai Bailian vs. Iat Automobile Technology | Shanghai Bailian vs. Zotye Automobile Co | Shanghai Bailian vs. Caihong Display Devices |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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