Correlation Between Jiangsu Yanghe and Eit Environmental
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By analyzing existing cross correlation between Jiangsu Yanghe Brewery and Eit Environmental Development, you can compare the effects of market volatilities on Jiangsu Yanghe and Eit Environmental 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 Jiangsu Yanghe with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yanghe and Eit Environmental.
Diversification Opportunities for Jiangsu Yanghe and Eit Environmental
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Eit is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yanghe Brewery and Eit Environmental Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eit Environmental and Jiangsu Yanghe 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 Jiangsu Yanghe Brewery are associated (or correlated) with Eit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eit Environmental has no effect on the direction of Jiangsu Yanghe i.e., Jiangsu Yanghe and Eit Environmental go up and down completely randomly.
Pair Corralation between Jiangsu Yanghe and Eit Environmental
Assuming the 90 days trading horizon Jiangsu Yanghe Brewery is expected to under-perform the Eit Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Jiangsu Yanghe Brewery is 1.83 times less risky than Eit Environmental. The stock trades about -0.13 of its potential returns per unit of risk. The Eit Environmental Development is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,556 in Eit Environmental Development on October 30, 2024 and sell it today you would lose (14.00) from holding Eit Environmental Development or give up 0.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangsu Yanghe Brewery vs. Eit Environmental Development
Performance |
Timeline |
Jiangsu Yanghe Brewery |
Eit Environmental |
Jiangsu Yanghe and Eit Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangsu Yanghe and Eit Environmental
The main advantage of trading using opposite Jiangsu Yanghe and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Yanghe position performs unexpectedly, Eit Environmental 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 Eit Environmental will offset losses from the drop in Eit Environmental's long position.Jiangsu Yanghe vs. Shanghai Broadband Technology | Jiangsu Yanghe vs. Hunan TV Broadcast | Jiangsu Yanghe vs. Anhui Deli Household | Jiangsu Yanghe vs. Anhui Transport Consulting |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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