Correlation Between Bank of China and Spring Airlines
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By analyzing existing cross correlation between Bank of China and Spring Airlines Co, you can compare the effects of market volatilities on Bank of China 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 Bank of China with a short position of Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and Spring Airlines.
Diversification Opportunities for Bank of China and Spring Airlines
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Spring is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines and Bank of China 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 Bank of China 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 Bank of China i.e., Bank of China and Spring Airlines go up and down completely randomly.
Pair Corralation between Bank of China and Spring Airlines
Assuming the 90 days trading horizon Bank of China is expected to generate 0.69 times more return on investment than Spring Airlines. However, Bank of China is 1.46 times less risky than Spring Airlines. It trades about 0.38 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 481.00 in Bank of China on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Bank of China or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of China vs. Spring Airlines Co
Performance |
| Timeline |
| Bank of China |
| Spring Airlines |
Bank of China and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of China and Spring Airlines
The main advantage of trading using opposite Bank of China and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China 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.| Bank of China vs. Chenzhou Jingui Silver | Bank of China vs. Hangzhou Pinming Software | Bank of China vs. Shandong Mining Machinery | Bank of China vs. Tibet Huayu Mining |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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