Correlation Between Guangzhou Dongfang and Eit Environmental
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Eit Environmental Development, you can compare the effects of market volatilities on Guangzhou Dongfang and Eit Environmental 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 Guangzhou Dongfang with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Eit Environmental.
Diversification Opportunities for Guangzhou Dongfang and Eit Environmental
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Eit is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Eit Environmental Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eit Environmental and Guangzhou Dongfang 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 Guangzhou Dongfang Hotel are associated (or correlated) with Eit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eit Environmental has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Eit Environmental go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Eit Environmental
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 9.16 times less return on investment than Eit Environmental. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 2.26 times less risky than Eit Environmental. It trades about 0.01 of its potential returns per unit of risk. Eit Environmental Development is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,520 in Eit Environmental Development on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Eit Environmental Development or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Eit Environmental Development
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Eit Environmental |
Guangzhou Dongfang and Eit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Eit Environmental
The main advantage of trading using opposite Guangzhou Dongfang and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Eit Environmental 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 Eit Environmental will offset losses from the drop in Eit Environmental's long position.| Guangzhou Dongfang vs. Songz Automobile Air | Guangzhou Dongfang vs. Zhejiang Publishing Media | Guangzhou Dongfang vs. Xinhua Winshare Publishing | Guangzhou Dongfang vs. Haima Automobile Group |
| Eit Environmental vs. Dhc Software Co | Eit Environmental vs. Guangzhou Dongfang Hotel | Eit Environmental vs. Xilinmen Furniture Co | Eit Environmental vs. Huatian Hotel Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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