Correlation Between Hainan Airlines and Shenzhen Changfang
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By analyzing existing cross correlation between Hainan Airlines Co and Shenzhen Changfang Light, you can compare the effects of market volatilities on Hainan Airlines and Shenzhen Changfang 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 Shenzhen Changfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Shenzhen Changfang.
Diversification Opportunities for Hainan Airlines and Shenzhen Changfang
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Shenzhen is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Shenzhen Changfang Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Changfang Light 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 Shenzhen Changfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Changfang Light has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Shenzhen Changfang go up and down completely randomly.
Pair Corralation between Hainan Airlines and Shenzhen Changfang
Assuming the 90 days trading horizon Hainan Airlines is expected to generate 2.06 times less return on investment than Shenzhen Changfang. In addition to that, Hainan Airlines is 1.05 times more volatile than Shenzhen Changfang Light. It trades about 0.12 of its total potential returns per unit of risk. Shenzhen Changfang Light is currently generating about 0.25 per unit of volatility. If you would invest 168.00 in Shenzhen Changfang Light on October 23, 2024 and sell it today you would earn a total of 25.00 from holding Shenzhen Changfang Light or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Shenzhen Changfang Light
Performance |
| Timeline |
| Hainan Airlines |
| Shenzhen Changfang Light |
Hainan Airlines and Shenzhen Changfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Shenzhen Changfang
The main advantage of trading using opposite Hainan Airlines and Shenzhen Changfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Shenzhen Changfang 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 Shenzhen Changfang will offset losses from the drop in Shenzhen Changfang's long position.| Hainan Airlines vs. Bank of China | Hainan Airlines vs. Kweichow Moutai Co | Hainan Airlines vs. PetroChina Co Ltd | Hainan Airlines vs. Bank of Communications |
| Shenzhen Changfang vs. Cabio Biotech Wuhan | Shenzhen Changfang vs. De Rucci Healthy | Shenzhen Changfang vs. Anhui Huaren Health | Shenzhen Changfang vs. Jiujiang Shanshui Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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