Correlation Between Hainan Airlines and Shanghai Phichem
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By analyzing existing cross correlation between Hainan Airlines Co and Shanghai Phichem Material, you can compare the effects of market volatilities on Hainan Airlines and Shanghai Phichem 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 Shanghai Phichem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Shanghai Phichem.
Diversification Opportunities for Hainan Airlines and Shanghai Phichem
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Shanghai is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Shanghai Phichem Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Phichem Material 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 Shanghai Phichem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Phichem Material has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Shanghai Phichem go up and down completely randomly.
Pair Corralation between Hainan Airlines and Shanghai Phichem
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 0.91 times more return on investment than Shanghai Phichem. However, Hainan Airlines Co is 1.1 times less risky than Shanghai Phichem. It trades about 0.15 of its potential returns per unit of risk. Shanghai Phichem Material is currently generating about 0.02 per unit of risk. If you would invest 22.00 in Hainan Airlines Co on October 14, 2024 and sell it today you would earn a total of 8.00 from holding Hainan Airlines Co or generate 36.36% 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. Shanghai Phichem Material
Performance |
| Timeline |
| Hainan Airlines |
| Shanghai Phichem Material |
Hainan Airlines and Shanghai Phichem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Shanghai Phichem
The main advantage of trading using opposite Hainan Airlines and Shanghai Phichem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Shanghai Phichem 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 Shanghai Phichem will offset losses from the drop in Shanghai Phichem's long position.| Hainan Airlines vs. Agricultural Bank of | Hainan Airlines vs. Peoples Insurance of | Hainan Airlines vs. JCHX Mining Management | Hainan Airlines vs. Chongqing Brewery Co |
| Shanghai Phichem vs. Tongling Nonferrous Metals | Shanghai Phichem vs. Beijing Bewinner Communications | Shanghai Phichem vs. Fiberhome Telecommunication Technologies | Shanghai Phichem vs. Hainan Airlines Co |
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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