Correlation Between China Construction and Spring Airlines
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By analyzing existing cross correlation between China Construction Bank and Spring Airlines Co, you can compare the effects of market volatilities on China Construction and Spring Airlines 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 China Construction with a short position of Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Spring Airlines.
Diversification Opportunities for China Construction and Spring Airlines
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Spring is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines and China Construction 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 China Construction Bank are associated (or correlated) with Spring Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Airlines has no effect on the direction of China Construction i.e., China Construction and Spring Airlines go up and down completely randomly.
Pair Corralation between China Construction and Spring Airlines
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.56 times more return on investment than Spring Airlines. However, China Construction Bank is 1.78 times less risky than Spring Airlines. It trades about 0.34 of its potential returns per unit of risk. Spring Airlines Co is currently generating about 0.11 per unit of risk. If you would invest 790.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 47.00 from holding China Construction Bank or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Spring Airlines Co
Performance |
| Timeline |
| China Construction Bank |
| Spring Airlines |
China Construction and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Spring Airlines
The main advantage of trading using opposite China Construction and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Spring Airlines 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 Spring Airlines will offset losses from the drop in Spring Airlines' long position.| China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
| Spring Airlines vs. Agricultural Bank of | Spring Airlines vs. Industrial and Commercial | Spring Airlines vs. Bank of China | Spring Airlines vs. PetroChina Co Ltd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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