Correlation Between HE Equipment and China Aircraft
Can any of the company-specific risk be diversified away by investing in both HE Equipment and China Aircraft 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 HE Equipment and China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and China Aircraft Leasing, you can compare the effects of market volatilities on HE Equipment and China Aircraft 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 HE Equipment with a short position of China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and China Aircraft.
Diversification Opportunities for HE Equipment and China Aircraft
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between HEES and China is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing and HE Equipment 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 HE Equipment Services are associated (or correlated) with China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of HE Equipment i.e., HE Equipment and China Aircraft go up and down completely randomly.
Pair Corralation between HE Equipment and China Aircraft
If you would invest 5,659 in HE Equipment Services on August 28, 2024 and sell it today you would earn a total of 420.00 from holding HE Equipment Services or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HE Equipment Services vs. China Aircraft Leasing
Performance |
| Timeline |
| HE Equipment Services |
| China Aircraft Leasing |
HE Equipment and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and China Aircraft
The main advantage of trading using opposite HE Equipment and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, China Aircraft 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 Aircraft will offset losses from the drop in China Aircraft's long position.| HE Equipment vs. PROG Holdings | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Mega Matrix Corp | HE Equipment vs. FTAI Aviation Ltd |
| China Aircraft vs. Senmiao Technology | China Aircraft vs. BCE Inc | China Aircraft vs. Olympic Steel | China Aircraft vs. WiMi Hologram Cloud |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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