Correlation Between China Eastern and Datalogic SpA
Can any of the company-specific risk be diversified away by investing in both China Eastern and Datalogic SpA 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 Datalogic SpA 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 Datalogic SpA, you can compare the effects of market volatilities on China Eastern and Datalogic SpA 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 Datalogic SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Datalogic SpA.
Diversification Opportunities for China Eastern and Datalogic SpA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Datalogic is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Datalogic SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datalogic SpA 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 Datalogic SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datalogic SpA has no effect on the direction of China Eastern i.e., China Eastern and Datalogic SpA go up and down completely randomly.
Pair Corralation between China Eastern and Datalogic SpA
Assuming the 90 days trading horizon China Eastern Airlines is expected to under-perform the Datalogic SpA. In addition to that, China Eastern is 1.8 times more volatile than Datalogic SpA. It trades about -0.31 of its total potential returns per unit of risk. Datalogic SpA is currently generating about -0.27 per unit of volatility. If you would invest 512.00 in Datalogic SpA on October 14, 2024 and sell it today you would lose (31.00) from holding Datalogic SpA or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Eastern Airlines vs. Datalogic SpA
Performance |
| Timeline |
| China Eastern Airlines |
| Datalogic SpA |
China Eastern and Datalogic SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Datalogic SpA
The main advantage of trading using opposite China Eastern and Datalogic SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Datalogic SpA 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 Datalogic SpA will offset losses from the drop in Datalogic SpA's long position.| China Eastern vs. GOLD ROAD RES | China Eastern vs. TRAINLINE PLC LS | China Eastern vs. Focus Home Interactive | China Eastern vs. 24SEVENOFFICE GROUP AB |
| Datalogic SpA vs. SEALED AIR | Datalogic SpA vs. Tradeweb Markets | Datalogic SpA vs. MARKET VECTR RETAIL | Datalogic SpA vs. FLOW TRADERS LTD |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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