Correlation Between Western Digital and China Southern
Can any of the company-specific risk be diversified away by investing in both Western Digital and China Southern 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 Western Digital and China Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Digital and China Southern Airlines, you can compare the effects of market volatilities on Western Digital and China Southern 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 Western Digital with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Digital and China Southern.
Diversification Opportunities for Western Digital and China Southern
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines and Western Digital 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 Western Digital are associated (or correlated) with China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of Western Digital i.e., Western Digital and China Southern go up and down completely randomly.
Pair Corralation between Western Digital and China Southern
If you would invest 3,697 in China Southern Airlines on September 5, 2024 and sell it today you would earn a total of 0.00 from holding China Southern Airlines or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Western Digital vs. China Southern Airlines
Performance |
| Timeline |
| Western Digital |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Digital and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Digital and China Southern
The main advantage of trading using opposite Western Digital and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Digital position performs unexpectedly, China Southern 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 Southern will offset losses from the drop in China Southern's long position.| Western Digital vs. NetApp Inc | Western Digital vs. Logitech International SA | Western Digital vs. HP Inc | Western Digital vs. Dell Technologies |
| China Southern vs. NETGEAR | China Southern vs. Western Digital | China Southern vs. JetBlue Airways Corp | China Southern vs. Senmiao Technology |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |