Correlation Between Gol Linhas and China Eastern
Can any of the company-specific risk be diversified away by investing in both Gol Linhas 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 Gol Linhas and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Linhas Aereas and China Eastern Airlines, you can compare the effects of market volatilities on Gol Linhas 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 Gol Linhas with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Linhas and China Eastern.
Diversification Opportunities for Gol Linhas and China Eastern
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gol and China is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Aereas 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 Gol Linhas 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 Gol Linhas Aereas 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 Gol Linhas i.e., Gol Linhas and China Eastern go up and down completely randomly.
Pair Corralation between Gol Linhas and China Eastern
If you would invest 1,998 in China Eastern Airlines on January 24, 2024 and sell it today you would earn a total of 0.00 from holding China Eastern Airlines or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Gol Linhas Aereas vs. China Eastern Airlines
Performance |
Timeline |
Gol Linhas Aereas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gol Linhas and China Eastern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gol Linhas and China Eastern
The main advantage of trading using opposite Gol Linhas and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Linhas 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.Gol Linhas vs. Azul SA | Gol Linhas vs. Air France KLM | Gol Linhas vs. Copa Holdings SA | Gol Linhas vs. International Consolidated Airlines |
China Eastern vs. Joint Stock | China Eastern vs. Albemarle Corp | China Eastern vs. Sensient Technologies | China Eastern vs. Sapiens International |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |