Correlation Between Orsted AS and China Eastern
Can any of the company-specific risk be diversified away by investing in both Orsted AS and China Eastern 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 Orsted AS and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orsted AS and China Eastern Airlines, you can compare the effects of market volatilities on Orsted AS and China Eastern 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 Orsted AS with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orsted AS and China Eastern.
Diversification Opportunities for Orsted AS and China Eastern
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orsted and China is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines and Orsted AS 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 Orsted AS are associated (or correlated) with China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Orsted AS i.e., Orsted AS and China Eastern go up and down completely randomly.
Pair Corralation between Orsted AS and China Eastern
Assuming the 90 days horizon Orsted AS is expected to under-perform the China Eastern. But the stock apears to be less risky and, when comparing its historical volatility, Orsted AS is 1.25 times less risky than China Eastern. The stock trades about -0.03 of its potential returns per unit of risk. The China Eastern Airlines is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 37.00 in China Eastern Airlines on November 8, 2024 and sell it today you would lose (7.00) from holding China Eastern Airlines or give up 18.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orsted AS vs. China Eastern Airlines
Performance |
| Timeline |
| Orsted AS |
| China Eastern Airlines |
Orsted AS and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orsted AS and China Eastern
The main advantage of trading using opposite Orsted AS and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orsted AS position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Orsted AS vs. Casio Computer CoLtd | Orsted AS vs. Verizon Communications | Orsted AS vs. Spirent Communications plc | Orsted AS vs. Gruppo Mutuionline SpA |
| China Eastern vs. Tower One Wireless | China Eastern vs. 24SEVENOFFICE GROUP AB | China Eastern vs. SLR Investment Corp | China Eastern vs. New Residential Investment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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