Correlation Between Guangzhou Dongfang and Eastern Communications
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Eastern Communications Co, you can compare the effects of market volatilities on Guangzhou Dongfang and Eastern Communications 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 Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Eastern Communications.
Diversification Opportunities for Guangzhou Dongfang and Eastern Communications
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Eastern is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications 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 Eastern Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Communications has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Eastern Communications go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Eastern Communications
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 1.74 times less return on investment than Eastern Communications. In addition to that, Guangzhou Dongfang is 1.01 times more volatile than Eastern Communications Co. It trades about 0.06 of its total potential returns per unit of risk. Eastern Communications Co is currently generating about 0.11 per unit of volatility. If you would invest 31.00 in Eastern Communications Co on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Eastern Communications Co or generate 38.71% 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. Eastern Communications Co
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Eastern Communications |
Guangzhou Dongfang and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Eastern Communications
The main advantage of trading using opposite Guangzhou Dongfang and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Eastern Communications 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 Eastern Communications will offset losses from the drop in Eastern Communications' 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 |
| Eastern Communications vs. Wuxi Chemical Equipment | Eastern Communications vs. Yangmei Chemical Co | Eastern Communications vs. Lander Sports Development | Eastern Communications vs. Jiangsu Jinling Sports |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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