Correlation Between China Securities and Eastern Communications
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By analyzing existing cross correlation between China Securities 800 and Eastern Communications Co, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Eastern Communications.
Diversification Opportunities for China Securities and Eastern Communications
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Eastern is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and China Securities 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 China Securities 800 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 China Securities i.e., China Securities and Eastern Communications go up and down completely randomly.
Pair Corralation between China Securities and Eastern Communications
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Eastern Communications. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 1.83 times less risky than Eastern Communications. The index trades about 0.0 of its potential returns per unit of risk. The Eastern Communications Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Eastern Communications Co on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Eastern Communications Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. Eastern Communications Co
Performance |
| Timeline |
China Securities and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Eastern Communications Co
Pair trading matchups for Eastern Communications
Pair Trading with China Securities and Eastern Communications
The main advantage of trading using opposite China Securities and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. Shandong Ruifeng Chemical | China Securities vs. Zhongtong Guomai Communication | China Securities vs. Gome Telecom Equipment | China Securities vs. Dymatic Chemicals |
| Eastern Communications vs. Guangdong Jinma Entertainment | Eastern Communications vs. Huaibei Mining Holdings | Eastern Communications vs. Zijin Mining Group | Eastern Communications vs. Xinjiang Baodi Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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