Correlation Between PACIFIC ONLINE and CHINA SOUTHN

Can any of the company-specific risk be diversified away by investing in both PACIFIC ONLINE and CHINA SOUTHN 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 PACIFIC ONLINE and CHINA SOUTHN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PACIFIC ONLINE and CHINA SOUTHN AIR H , you can compare the effects of market volatilities on PACIFIC ONLINE and CHINA SOUTHN 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 PACIFIC ONLINE with a short position of CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC ONLINE and CHINA SOUTHN.

Diversification Opportunities for PACIFIC ONLINE and CHINA SOUTHN

0.0

Correlation Coefficient

PACIFIC ONLINE  CHINA SOUTHN

Pay attention - limited upside

The 3 months correlation between PACIFIC and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR and PACIFIC ONLINE 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 PACIFIC ONLINE are associated (or correlated) with CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of PACIFIC ONLINE i.e., PACIFIC ONLINE and CHINA SOUTHN go up and down completely randomly.

Pair Corralation between PACIFIC ONLINE and CHINA SOUTHN

If you would invest  15.00  in PACIFIC ONLINE on December 22, 2024 and sell it today you would earn a total of  0.00  from holding PACIFIC ONLINE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PACIFIC ONLINE  vs.  CHINA SOUTHN AIR H

PACIFIC ONLINE

Risk-Adjusted Performance

Very Weak

Over the last 90 days PACIFIC ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PACIFIC ONLINE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CHINA SOUTHN AIR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHINA SOUTHN AIR H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PACIFIC ONLINE and CHINA SOUTHN

The main advantage of trading using opposite PACIFIC ONLINE and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC ONLINE position performs unexpectedly, CHINA SOUTHN 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 SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.

The idea behind PACIFIC ONLINE and CHINA SOUTHN AIR H pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.