Correlation Between Hawaiian Hlds and China Eastern

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Can any of the company-specific risk be diversified away by investing in both Hawaiian Hlds and China Eastern 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 Hawaiian Hlds and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Hlds and China Eastern Airlines, you can compare the effects of market volatilities on Hawaiian Hlds and China Eastern 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 Hawaiian Hlds with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Hlds and China Eastern.

Diversification Opportunities for Hawaiian Hlds and China Eastern

0.58
  Correlation Coefficient

Very weak diversification

The 24 months correlation between Hawaiian and China is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Hlds and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines and Hawaiian Hlds 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 Hawaiian Hlds are associated (or correlated) with China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Hawaiian Hlds i.e., Hawaiian Hlds and China Eastern go up and down completely randomly.

Pair Corralation between Hawaiian Hlds and China Eastern

Allowing for the 90-day total investment horizon Hawaiian Hlds is expected to under-perform the China Eastern. In addition to that, Hawaiian Hlds is 1.82 times more volatile than China Eastern Airlines. It trades about -0.25 of its total potential returns per unit of risk. China Eastern Airlines is currently generating about -0.15 per unit of volatility. If you would invest  1,766  in China Eastern Airlines on June 29, 2022 and sell it today you would lose (86.00)  from holding China Eastern Airlines or give up 4.87% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Hawaiian Hlds  vs.  China Eastern Airlines

 Performance (%) 
       Timeline  
Hawaiian Hlds 
Hawaiian Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hawaiian Hlds are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hawaiian Hlds is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Hawaiian Price Channel

China Eastern Airlines 
China Performance
0 of 100
Over the last 90 days China Eastern Airlines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, China Eastern is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

China Price Channel

Hawaiian Hlds and China Eastern Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hawaiian Hlds and China Eastern

The main advantage of trading using opposite Hawaiian Hlds and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Hlds position performs unexpectedly, China Eastern 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 Eastern will offset losses from the drop in China Eastern's long position.
Hawaiian Hlds vs. Sunrun Inc
The idea behind Hawaiian Hlds and China Eastern Airlines 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.
China Eastern vs. Sunrun Inc
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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