Correlation Between Hainan Airlines and Western Superconducting
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By analyzing existing cross correlation between Hainan Airlines Co and Western Superconducting Tech, you can compare the effects of market volatilities on Hainan Airlines and Western Superconducting 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 Hainan Airlines with a short position of Western Superconducting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Western Superconducting.
Diversification Opportunities for Hainan Airlines and Western Superconducting
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hainan and Western is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Western Superconducting Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Superconducting and Hainan Airlines 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 Hainan Airlines Co are associated (or correlated) with Western Superconducting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Superconducting has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Western Superconducting go up and down completely randomly.
Pair Corralation between Hainan Airlines and Western Superconducting
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 2.12 times more return on investment than Western Superconducting. However, Hainan Airlines is 2.12 times more volatile than Western Superconducting Tech. It trades about 0.17 of its potential returns per unit of risk. Western Superconducting Tech is currently generating about -0.09 per unit of risk. If you would invest 166.00 in Hainan Airlines Co on September 24, 2024 and sell it today you would earn a total of 18.00 from holding Hainan Airlines Co or generate 10.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Hainan Airlines Co vs. Western Superconducting Tech
Performance |
Timeline |
Hainan Airlines |
Western Superconducting |
Hainan Airlines and Western Superconducting Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hainan Airlines and Western Superconducting
The main advantage of trading using opposite Hainan Airlines and Western Superconducting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Western Superconducting 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 Western Superconducting will offset losses from the drop in Western Superconducting's long position.Hainan Airlines vs. Industrial and Commercial | Hainan Airlines vs. Agricultural Bank of | Hainan Airlines vs. China Construction Bank | Hainan Airlines vs. Bank of China |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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