Correlation Between China Eastern and AUSNUTRIA DAIRY

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Can any of the company-specific risk be diversified away by investing in both China Eastern and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY, you can compare the effects of market volatilities on China Eastern and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and AUSNUTRIA DAIRY.

Diversification Opportunities for China Eastern and AUSNUTRIA DAIRY

ChinaAUSNUTRIADiversified AwayChinaAUSNUTRIADiversified Away100%
-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between China and AUSNUTRIA is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of China Eastern i.e., China Eastern and AUSNUTRIA DAIRY go up and down completely randomly.

Pair Corralation between China Eastern and AUSNUTRIA DAIRY

Assuming the 90 days trading horizon China Eastern Airlines is expected to generate 1.79 times more return on investment than AUSNUTRIA DAIRY. However, China Eastern is 1.79 times more volatile than AUSNUTRIA DAIRY. It trades about 0.01 of its potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about -0.04 per unit of risk. If you would invest  35.00  in China Eastern Airlines on October 31, 2024 and sell it today you would lose (6.00) from holding China Eastern Airlines or give up 17.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

China Eastern Airlines  vs.  AUSNUTRIA DAIRY

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100102030
JavaScript chart by amCharts 3.21.15CIAH 6AH
       Timeline  
China Eastern Airlines 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in China Eastern Airlines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Eastern reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.250.260.270.280.290.30.310.320.33
AUSNUTRIA DAIRY 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AUSNUTRIA DAIRY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, AUSNUTRIA DAIRY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.210.2150.220.2250.230.2350.240.2450.25

China Eastern and AUSNUTRIA DAIRY Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.57-8.67-5.76-2.860.02.945.999.0312.0815.12 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15CIAH 6AH
       Returns  

Pair Trading with China Eastern and AUSNUTRIA DAIRY

The main advantage of trading using opposite China Eastern and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.
The idea behind China Eastern Airlines and AUSNUTRIA DAIRY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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