Correlation Between China Southern and China Southern
Can any of the company-specific risk be diversified away by investing in both China Southern 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 China Southern and China Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Southern Airlines and China Southern Airlines, you can compare the effects of market volatilities on China Southern 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 China Southern with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Southern and China Southern.
Diversification Opportunities for China Southern and China Southern
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding China Southern Airlines 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 China Southern 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 China Southern Airlines 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 China Southern i.e., China Southern and China Southern go up and down completely randomly.
Pair Corralation between China Southern and China Southern
If you would invest 33.00 in China Southern Airlines on August 26, 2024 and sell it today you would earn a total of 13.00 from holding China Southern Airlines or generate 39.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.27% |
| Values | Daily Returns |
China Southern Airlines vs. China Southern Airlines
Performance |
| Timeline |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Southern Airlines |
China Southern and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Southern and China Southern
The main advantage of trading using opposite China Southern and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Southern 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.| China Southern vs. Fidus Investment Corp | China Southern vs. Black Hills | China Southern vs. Hf Foods Group | China Southern vs. Albertsons Companies |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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