Correlation Between Industrial and China Eastern
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By analyzing existing cross correlation between Industrial and Commercial and China Eastern Airlines, you can compare the effects of market volatilities on Industrial and China Eastern 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 Industrial with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and China Eastern.
Diversification Opportunities for Industrial and China Eastern
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Industrial and China is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines and Industrial 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 Industrial and Commercial are associated (or correlated) with China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Industrial i.e., Industrial and China Eastern go up and down completely randomly.
Pair Corralation between Industrial and China Eastern
Assuming the 90 days trading horizon Industrial and Commercial is expected to generate 1.2 times more return on investment than China Eastern. However, Industrial is 1.2 times more volatile than China Eastern Airlines. It trades about 0.08 of its potential returns per unit of risk. China Eastern Airlines is currently generating about -0.47 per unit of risk. If you would invest 653.00 in Industrial and Commercial on October 15, 2024 and sell it today you would earn a total of 14.00 from holding Industrial and Commercial or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. China Eastern Airlines
Performance |
| Timeline |
| Industrial and Commercial |
| China Eastern Airlines |
Industrial and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and China Eastern
The main advantage of trading using opposite Industrial and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Industrial vs. Huizhou Speed Wireless | Industrial vs. Winner Medical Co | Industrial vs. Quectel Wireless Solutions | Industrial vs. Kontour Medical Technology |
| China Eastern vs. BYD Co Ltd | China Eastern vs. China Mobile Limited | China Eastern vs. Agricultural Bank of | China Eastern vs. Industrial and Commercial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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