Correlation Between Hainan Airlines and Spring Airlines
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By analyzing existing cross correlation between Hainan Airlines Co and Spring Airlines Co, you can compare the effects of market volatilities on Hainan Airlines 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 Hainan Airlines with a short position of Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Spring Airlines.
Diversification Opportunities for Hainan Airlines and Spring Airlines
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hainan and Spring is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines 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 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 Hainan Airlines i.e., Hainan Airlines and Spring Airlines go up and down completely randomly.
Pair Corralation between Hainan Airlines and Spring Airlines
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 2.7 times more return on investment than Spring Airlines. However, Hainan Airlines is 2.7 times more volatile than Spring Airlines Co. It trades about 0.09 of its potential returns per unit of risk. Spring Airlines Co is currently generating about -0.03 per unit of risk. If you would invest 29.00 in Hainan Airlines Co on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Hainan Airlines Co or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Airlines Co vs. Spring Airlines Co
Performance |
| Timeline |
| Hainan Airlines |
| Spring Airlines |
Hainan Airlines and Spring Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hainan Airlines and Spring Airlines
The main advantage of trading using opposite Hainan Airlines and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines 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.| Hainan Airlines vs. Spring Airlines Co | Hainan Airlines vs. Anji Foodstuff Co | Hainan Airlines vs. Xizi Clean Energy | Hainan Airlines vs. Guangdong Wens Foodstuff |
| Spring Airlines vs. Agricultural Bank of | Spring Airlines vs. Industrial and Commercial | Spring Airlines vs. Bank of China | Spring Airlines vs. China Construction Bank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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