Correlation Between MARKET VECTR and China Eastern
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR 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 MARKET VECTR and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARKET VECTR RETAIL and China Eastern Airlines, you can compare the effects of market volatilities on MARKET VECTR 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 MARKET VECTR with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and China Eastern.
Diversification Opportunities for MARKET VECTR and China Eastern
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MARKET and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and China Eastern go up and down completely randomly.
Pair Corralation between MARKET VECTR and China Eastern
Assuming the 90 days trading horizon MARKET VECTR is expected to generate 1.27 times less return on investment than China Eastern. But when comparing it to its historical volatility, MARKET VECTR RETAIL is 4.68 times less risky than China Eastern. It trades about 0.27 of its potential returns per unit of risk. China Eastern Airlines is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 31.00 in China Eastern Airlines on October 25, 2024 and sell it today you would earn a total of 1.00 from holding China Eastern Airlines or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. China Eastern Airlines
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| China Eastern Airlines |
MARKET VECTR and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and China Eastern
The main advantage of trading using opposite MARKET VECTR and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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.| MARKET VECTR vs. BORR DRILLING NEW | MARKET VECTR vs. GBS Software AG | MARKET VECTR vs. VITEC SOFTWARE GROUP | MARKET VECTR vs. Major Drilling Group |
| China Eastern vs. MARKET VECTR RETAIL | China Eastern vs. KENEDIX OFFICE INV | China Eastern vs. Caseys General Stores | China Eastern vs. HOME DEPOT |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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