Correlation Between Fuji Media and China Eastern
Can any of the company-specific risk be diversified away by investing in both Fuji Media 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 Fuji Media and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuji Media Holdings and China Eastern Airlines, you can compare the effects of market volatilities on Fuji Media 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 Fuji Media with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuji Media and China Eastern.
Diversification Opportunities for Fuji Media and China Eastern
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fuji and China is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fuji Media Holdings 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 Fuji Media 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 Fuji Media Holdings 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 Fuji Media i.e., Fuji Media and China Eastern go up and down completely randomly.
Pair Corralation between Fuji Media and China Eastern
Assuming the 90 days trading horizon Fuji Media Holdings is expected to generate 0.52 times more return on investment than China Eastern. However, Fuji Media Holdings is 1.93 times less risky than China Eastern. It trades about 0.07 of its potential returns per unit of risk. China Eastern Airlines is currently generating about 0.01 per unit of risk. If you would invest 740.00 in Fuji Media Holdings on November 2, 2024 and sell it today you would earn a total of 660.00 from holding Fuji Media Holdings or generate 89.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fuji Media Holdings vs. China Eastern Airlines
Performance |
| Timeline |
| Fuji Media Holdings |
| China Eastern Airlines |
Fuji Media and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuji Media and China Eastern
The main advantage of trading using opposite Fuji Media and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuji Media 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.| Fuji Media vs. X FAB Silicon Foundries | Fuji Media vs. RCI Hospitality Holdings | Fuji Media vs. KINGBOARD CHEMICAL | Fuji Media vs. CHEMICAL INDUSTRIES |
| China Eastern vs. Apollo Investment Corp | China Eastern vs. New Residential Investment | China Eastern vs. Scottish Mortgage Investment | China Eastern vs. HK Electric Investments |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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