Correlation Between China Eastern and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both China Eastern and GREENX METALS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Eastern and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Eastern Airlines and GREENX METALS LTD, you can compare the effects of market volatilities on China Eastern and GREENX METALS 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 China Eastern with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and GREENX METALS.
Diversification Opportunities for China Eastern and GREENX METALS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and GREENX is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and China Eastern 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 China Eastern Airlines are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of China Eastern i.e., China Eastern and GREENX METALS go up and down completely randomly.
Pair Corralation between China Eastern and GREENX METALS
Assuming the 90 days trading horizon China Eastern is expected to generate 13.49 times less return on investment than GREENX METALS. In addition to that, China Eastern is 1.04 times more volatile than GREENX METALS LTD. It trades about 0.01 of its total potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.2 per unit of volatility. If you would invest 40.00 in GREENX METALS LTD on October 25, 2024 and sell it today you would earn a total of 4.00 from holding GREENX METALS LTD or generate 10.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 94.44% |
Values | Daily Returns |
China Eastern Airlines vs. GREENX METALS LTD
Performance |
Timeline |
China Eastern Airlines |
GREENX METALS LTD |
China Eastern and GREENX METALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Eastern and GREENX METALS
The main advantage of trading using opposite China Eastern and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.China Eastern vs. Autohome ADR | China Eastern vs. FLOW TRADERS LTD | China Eastern vs. OFFICE DEPOT | China Eastern vs. Haverty Furniture Companies |
GREENX METALS vs. Sunstone Hotel Investors | GREENX METALS vs. DALATA HOTEL | GREENX METALS vs. MELIA HOTELS | GREENX METALS vs. HYATT HOTELS A |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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