Correlation Between LianChuang Electronic and Eastern Communications
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By analyzing existing cross correlation between LianChuang Electronic Technology and Eastern Communications Co, you can compare the effects of market volatilities on LianChuang Electronic 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 LianChuang Electronic with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianChuang Electronic and Eastern Communications.
Diversification Opportunities for LianChuang Electronic and Eastern Communications
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LianChuang and Eastern is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding LianChuang Electronic Technolo and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and LianChuang Electronic 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 LianChuang Electronic Technology 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 LianChuang Electronic i.e., LianChuang Electronic and Eastern Communications go up and down completely randomly.
Pair Corralation between LianChuang Electronic and Eastern Communications
Assuming the 90 days trading horizon LianChuang Electronic Technology is expected to generate 1.53 times more return on investment than Eastern Communications. However, LianChuang Electronic is 1.53 times more volatile than Eastern Communications Co. It trades about 0.01 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.0 per unit of risk. If you would invest 980.00 in LianChuang Electronic Technology on October 16, 2024 and sell it today you would lose (51.00) from holding LianChuang Electronic Technology or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LianChuang Electronic Technolo vs. Eastern Communications Co
Performance |
| Timeline |
| LianChuang Electronic |
| Eastern Communications |
LianChuang Electronic and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianChuang Electronic and Eastern Communications
The main advantage of trading using opposite LianChuang Electronic and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianChuang Electronic 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.| LianChuang Electronic vs. Ningbo Tech Bank Co | LianChuang Electronic vs. Guangdong Qunxing Toys | LianChuang Electronic vs. StarPower Semiconductor | LianChuang Electronic vs. Hua Xia Bank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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