Correlation Between Hainan Airlines and Bank of China
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By analyzing existing cross correlation between Hainan Airlines Co and Bank of China, you can compare the effects of market volatilities on Hainan Airlines and Bank of China 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 Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Airlines and Bank of China.
Diversification Opportunities for Hainan Airlines and Bank of China
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hainan and Bank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Airlines Co and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China 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 Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of Hainan Airlines i.e., Hainan Airlines and Bank of China go up and down completely randomly.
Pair Corralation between Hainan Airlines and Bank of China
Assuming the 90 days trading horizon Hainan Airlines Co is expected to generate 3.13 times more return on investment than Bank of China. However, Hainan Airlines is 3.13 times more volatile than Bank of China. It trades about 0.23 of its potential returns per unit of risk. Bank of China is currently generating about 0.1 per unit of risk. If you would invest 105.00 in Hainan Airlines Co on September 5, 2024 and sell it today you would earn a total of 81.00 from holding Hainan Airlines Co or generate 77.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hainan Airlines Co vs. Bank of China
Performance |
Timeline |
Hainan Airlines |
Bank of China |
Hainan Airlines and Bank of China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hainan Airlines and Bank of China
The main advantage of trading using opposite Hainan Airlines and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Airlines position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China's long position.Hainan Airlines vs. Agricultural Bank of | Hainan Airlines vs. Industrial and Commercial | Hainan Airlines vs. Bank of China | Hainan Airlines vs. China Construction Bank |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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