Correlation Between Anhui Huaheng and Spring Airlines
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By analyzing existing cross correlation between Anhui Huaheng Biotechnology and Spring Airlines Co, you can compare the effects of market volatilities on Anhui Huaheng 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 Anhui Huaheng with a short position of Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anhui Huaheng and Spring Airlines.
Diversification Opportunities for Anhui Huaheng and Spring Airlines
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anhui and Spring is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Anhui Huaheng Biotechnology and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines and Anhui Huaheng 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 Anhui Huaheng Biotechnology 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 Anhui Huaheng i.e., Anhui Huaheng and Spring Airlines go up and down completely randomly.
Pair Corralation between Anhui Huaheng and Spring Airlines
Assuming the 90 days trading horizon Anhui Huaheng Biotechnology is expected to generate 0.8 times more return on investment than Spring Airlines. However, Anhui Huaheng Biotechnology is 1.24 times less risky than Spring Airlines. It trades about -0.18 of its potential returns per unit of risk. Spring Airlines Co is currently generating about -0.2 per unit of risk. If you would invest 2,814 in Anhui Huaheng Biotechnology on November 8, 2024 and sell it today you would lose (129.00) from holding Anhui Huaheng Biotechnology or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Anhui Huaheng Biotechnology vs. Spring Airlines Co
Performance |
| Timeline |
| Anhui Huaheng Biotec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Spring Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anhui Huaheng and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anhui Huaheng and Spring Airlines
The main advantage of trading using opposite Anhui Huaheng and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anhui Huaheng 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.The idea behind Anhui Huaheng Biotechnology and Spring Airlines Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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