Correlation Between Hangzhou Zhongya and Hainan Airlines
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By analyzing existing cross correlation between Hangzhou Zhongya Machinery and Hainan Airlines Co, you can compare the effects of market volatilities on Hangzhou Zhongya and Hainan Airlines 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 Hangzhou Zhongya with a short position of Hainan Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Zhongya and Hainan Airlines.
Diversification Opportunities for Hangzhou Zhongya and Hainan Airlines
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hangzhou and Hainan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Zhongya Machinery and Hainan Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Airlines and Hangzhou Zhongya 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 Hangzhou Zhongya Machinery are associated (or correlated) with Hainan Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Airlines has no effect on the direction of Hangzhou Zhongya i.e., Hangzhou Zhongya and Hainan Airlines go up and down completely randomly.
Pair Corralation between Hangzhou Zhongya and Hainan Airlines
Assuming the 90 days trading horizon Hangzhou Zhongya is expected to generate 2.16 times less return on investment than Hainan Airlines. But when comparing it to its historical volatility, Hangzhou Zhongya Machinery is 1.22 times less risky than Hainan Airlines. It trades about 0.11 of its potential returns per unit of risk. Hainan Airlines Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Hainan Airlines Co on September 25, 2024 and sell it today you would earn a total of 67.00 from holding Hainan Airlines Co or generate 60.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hangzhou Zhongya Machinery vs. Hainan Airlines Co
Performance |
Timeline |
Hangzhou Zhongya Mac |
Hainan Airlines |
Hangzhou Zhongya and Hainan Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hangzhou Zhongya and Hainan Airlines
The main advantage of trading using opposite Hangzhou Zhongya and Hainan Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Zhongya position performs unexpectedly, Hainan Airlines 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 Hainan Airlines will offset losses from the drop in Hainan Airlines' long position.Hangzhou Zhongya vs. Winner Medical Co | Hangzhou Zhongya vs. Innovative Medical Management | Hangzhou Zhongya vs. Cowealth Medical China | Hangzhou Zhongya vs. Kontour Medical Technology |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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