Correlation Between China Eastern and Apple
Can any of the company-specific risk be diversified away by investing in both China Eastern and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on China Eastern and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Apple.
Diversification Opportunities for China Eastern and Apple
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Apple is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of China Eastern i.e., China Eastern and Apple go up and down completely randomly.
Pair Corralation between China Eastern and Apple
Assuming the 90 days trading horizon China Eastern is expected to generate 1.19 times less return on investment than Apple. In addition to that, China Eastern is 4.38 times more volatile than Apple Inc. It trades about 0.06 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.34 per unit of volatility. If you would invest 20,915 in Apple Inc on October 11, 2024 and sell it today you would earn a total of 2,660 from holding Apple Inc or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Eastern Airlines vs. Apple Inc
Performance |
| Timeline |
| China Eastern Airlines |
| Apple Inc |
China Eastern and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Apple
The main advantage of trading using opposite China Eastern and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| China Eastern vs. GREENX METALS LTD | China Eastern vs. GALENA MINING LTD | China Eastern vs. Calibre Mining Corp | China Eastern vs. Astral Foods Limited |
| Apple vs. Nok Airlines PCL | Apple vs. China Eastern Airlines | Apple vs. SOUTHWEST AIRLINES | Apple vs. Monument Mining Limited |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |