Correlation Between Hainan Airlines and Kangyue Technology
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By analyzing existing cross correlation between Hainan Airlines Co and Kangyue Technology Co, you can compare the effects of market volatilities on Hainan Airlines and Kangyue Technology 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 Kangyue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Kangyue Technology.
Diversification Opportunities for Hainan Airlines and Kangyue Technology
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hainan and Kangyue is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Kangyue Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangyue Technology 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 Kangyue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangyue Technology has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Kangyue Technology go up and down completely randomly.
Pair Corralation between Hainan Airlines and Kangyue Technology
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 0.85 times more return on investment than Kangyue Technology. However, Hainan Airlines Co is 1.18 times less risky than Kangyue Technology. It trades about 0.11 of its potential returns per unit of risk. Kangyue Technology Co is currently generating about -0.29 per unit of risk. If you would invest 31.00 in Hainan Airlines Co on October 24, 2024 and sell it today you would earn a total of 2.00 from holding Hainan Airlines Co or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Kangyue Technology Co
Performance |
| Timeline |
| Hainan Airlines |
| Kangyue Technology |
Hainan Airlines and Kangyue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Kangyue Technology
The main advantage of trading using opposite Hainan Airlines and Kangyue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Kangyue Technology 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 Kangyue Technology will offset losses from the drop in Kangyue Technology's long position.| Hainan Airlines vs. Nanjing Putian Telecommunications | Hainan Airlines vs. Citic Offshore Helicopter | Hainan Airlines vs. TianJin 712 Communication | Hainan Airlines vs. Bank of Communications |
| Kangyue Technology vs. Bosera CMSK Industrial | Kangyue Technology vs. Allwin Telecommunication Co | Kangyue Technology vs. Beijing Bewinner Communications | Kangyue Technology vs. Qingdao Choho Industrial |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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