Correlation Between Hainan Airlines and Beijing Yanjing
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By analyzing existing cross correlation between Hainan Airlines Co and Beijing Yanjing Brewery, you can compare the effects of market volatilities on Hainan Airlines and Beijing Yanjing 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 Hainan Airlines with a short position of Beijing Yanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Beijing Yanjing.
Diversification Opportunities for Hainan Airlines and Beijing Yanjing
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Beijing is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Beijing Yanjing Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Yanjing Brewery and Hainan Airlines 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 Hainan Airlines Co are associated (or correlated) with Beijing Yanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Yanjing Brewery has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Beijing Yanjing go up and down completely randomly.
Pair Corralation between Hainan Airlines and Beijing Yanjing
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 2.16 times more return on investment than Beijing Yanjing. However, Hainan Airlines is 2.16 times more volatile than Beijing Yanjing Brewery. It trades about -0.09 of its potential returns per unit of risk. Beijing Yanjing Brewery is currently generating about -0.21 per unit of risk. If you would invest 34.00 in Hainan Airlines Co on October 29, 2024 and sell it today you would lose (2.00) from holding Hainan Airlines Co or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Beijing Yanjing Brewery
Performance |
| Timeline |
| Hainan Airlines |
| Beijing Yanjing Brewery |
Hainan Airlines and Beijing Yanjing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Beijing Yanjing
The main advantage of trading using opposite Hainan Airlines and Beijing Yanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Beijing Yanjing 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 Beijing Yanjing will offset losses from the drop in Beijing Yanjing's long position.| Hainan Airlines vs. Eyebright Medical Technology | Hainan Airlines vs. Cowealth Medical China | Hainan Airlines vs. Sihui Fuji Electronics | Hainan Airlines vs. Kontour Medical Technology |
| Beijing Yanjing vs. Southern PublishingMedia Co | Beijing Yanjing vs. Sportsoul Co Ltd | Beijing Yanjing vs. Pengxin International Mining | Beijing Yanjing vs. Vats Liquor Chain |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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