Correlation Between Digital China and Integrated Electronic
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By analyzing existing cross correlation between Digital China Information and Integrated Electronic Systems, you can compare the effects of market volatilities on Digital China and Integrated Electronic 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 Digital China with a short position of Integrated Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Integrated Electronic.
Diversification Opportunities for Digital China and Integrated Electronic
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Digital and Integrated is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and Integrated Electronic Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Electronic and Digital China 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 Digital China Information are associated (or correlated) with Integrated Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Electronic has no effect on the direction of Digital China i.e., Digital China and Integrated Electronic go up and down completely randomly.
Pair Corralation between Digital China and Integrated Electronic
Assuming the 90 days trading horizon Digital China Information is expected to generate 0.94 times more return on investment than Integrated Electronic. However, Digital China Information is 1.07 times less risky than Integrated Electronic. It trades about 0.02 of its potential returns per unit of risk. Integrated Electronic Systems is currently generating about 0.01 per unit of risk. If you would invest 1,160 in Digital China Information on August 26, 2024 and sell it today you would earn a total of 7.00 from holding Digital China Information or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital China Information vs. Integrated Electronic Systems
Performance |
| Timeline |
| Digital China Information |
| Integrated Electronic |
Digital China and Integrated Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and Integrated Electronic
The main advantage of trading using opposite Digital China and Integrated Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Integrated Electronic 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 Integrated Electronic will offset losses from the drop in Integrated Electronic's long position.| Digital China vs. Cultural Investment Holdings | Digital China vs. Gome Telecom Equipment | Digital China vs. Bus Online Co | Digital China vs. Holitech Technology Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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