Correlation Between Xinjiang Zhongtai and Eastern Communications
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By analyzing existing cross correlation between Xinjiang Zhongtai Chemical and Eastern Communications Co, you can compare the effects of market volatilities on Xinjiang Zhongtai 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 Xinjiang Zhongtai with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Zhongtai and Eastern Communications.
Diversification Opportunities for Xinjiang Zhongtai and Eastern Communications
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xinjiang and Eastern is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Zhongtai Chemical and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Xinjiang Zhongtai 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 Xinjiang Zhongtai Chemical 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 Xinjiang Zhongtai i.e., Xinjiang Zhongtai and Eastern Communications go up and down completely randomly.
Pair Corralation between Xinjiang Zhongtai and Eastern Communications
Assuming the 90 days trading horizon Xinjiang Zhongtai is expected to generate 1.12 times less return on investment than Eastern Communications. But when comparing it to its historical volatility, Xinjiang Zhongtai Chemical is 1.34 times less risky than Eastern Communications. It trades about 0.26 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Eastern Communications Co on September 12, 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Zhongtai Chemical vs. Eastern Communications Co
Performance |
| Timeline |
| Xinjiang Zhongtai |
| Eastern Communications |
Xinjiang Zhongtai and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Zhongtai and Eastern Communications
The main advantage of trading using opposite Xinjiang Zhongtai and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Zhongtai 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.| Xinjiang Zhongtai vs. Sunny Loan Top | Xinjiang Zhongtai vs. Ye Chiu Metal | Xinjiang Zhongtai vs. Xinjiang Baodi Mining | Xinjiang Zhongtai vs. Zhejiang Kingland Pipeline |
| Eastern Communications vs. Industrial and Commercial | Eastern Communications vs. China Construction Bank | Eastern Communications vs. Bank of China | Eastern Communications vs. Agricultural Bank of |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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