Correlation Between Gol Intelligent and China Eastern
Can any of the company-specific risk be diversified away by investing in both Gol Intelligent 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 Gol Intelligent and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Intelligent Airlines and China Eastern Airlines, you can compare the effects of market volatilities on Gol Intelligent 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 Gol Intelligent with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Intelligent and China Eastern.
Diversification Opportunities for Gol Intelligent and China Eastern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gol and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gol Intelligent Airlines 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 Gol Intelligent 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 Gol Intelligent Airlines 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 Gol Intelligent i.e., Gol Intelligent and China Eastern go up and down completely randomly.
Pair Corralation between Gol Intelligent and China Eastern
Assuming the 90 days trading horizon Gol Intelligent Airlines is expected to under-perform the China Eastern. In addition to that, Gol Intelligent is 1.89 times more volatile than China Eastern Airlines. It trades about -0.01 of its total potential returns per unit of risk. China Eastern Airlines is currently generating about 0.01 per unit of volatility. If you would invest 37.00 in China Eastern Airlines on October 12, 2024 and sell it today you would lose (8.00) from holding China Eastern Airlines or give up 21.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gol Intelligent Airlines vs. China Eastern Airlines
Performance |
| Timeline |
| Gol Intelligent Airlines |
| China Eastern Airlines |
Gol Intelligent and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gol Intelligent and China Eastern
The main advantage of trading using opposite Gol Intelligent and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Intelligent 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.| Gol Intelligent vs. Southwest Airlines Co | Gol Intelligent vs. DEVRY EDUCATION GRP | Gol Intelligent vs. CAREER EDUCATION | Gol Intelligent vs. American Public Education |
| China Eastern vs. Axway Software SA | China Eastern vs. CyberArk Software | China Eastern vs. Brockhaus Capital Management | China Eastern vs. Unity Software |
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.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Transaction History View history of all your transactions and understand their impact on performance |