Correlation Between China Eastern and Fuji Media
Can any of the company-specific risk be diversified away by investing in both China Eastern and Fuji Media 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 Fuji Media 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 Fuji Media Holdings, you can compare the effects of market volatilities on China Eastern and Fuji Media 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 Fuji Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and Fuji Media.
Diversification Opportunities for China Eastern and Fuji Media
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Fuji is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media Holdings 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 Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of China Eastern i.e., China Eastern and Fuji Media go up and down completely randomly.
Pair Corralation between China Eastern and Fuji Media
Assuming the 90 days trading horizon China Eastern Airlines is expected to under-perform the Fuji Media. But the stock apears to be less risky and, when comparing its historical volatility, China Eastern Airlines is 1.27 times less risky than Fuji Media. The stock trades about -0.04 of its potential returns per unit of risk. The Fuji Media Holdings is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Fuji Media Holdings on November 2, 2024 and sell it today you would earn a total of 360.00 from holding Fuji Media Holdings or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Eastern Airlines vs. Fuji Media Holdings
Performance |
| Timeline |
| China Eastern Airlines |
| Fuji Media Holdings |
China Eastern and Fuji Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and Fuji Media
The main advantage of trading using opposite China Eastern and Fuji Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern position performs unexpectedly, Fuji Media 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 Fuji Media will offset losses from the drop in Fuji Media's long position.| China Eastern vs. Apollo Investment Corp | China Eastern vs. New Residential Investment | China Eastern vs. Scottish Mortgage Investment | China Eastern vs. HK Electric Investments |
| Fuji Media vs. X FAB Silicon Foundries | Fuji Media vs. RCI Hospitality Holdings | Fuji Media vs. KINGBOARD CHEMICAL | Fuji Media vs. CHEMICAL INDUSTRIES |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |