Correlation Between Zhejiang JIULI and Eastern Communications
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By analyzing existing cross correlation between Zhejiang JIULI Hi tech and Eastern Communications Co, you can compare the effects of market volatilities on Zhejiang JIULI 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 Zhejiang JIULI with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang JIULI and Eastern Communications.
Diversification Opportunities for Zhejiang JIULI and Eastern Communications
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhejiang and Eastern is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang JIULI Hi tech and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Zhejiang JIULI 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 Zhejiang JIULI Hi tech 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 Zhejiang JIULI i.e., Zhejiang JIULI and Eastern Communications go up and down completely randomly.
Pair Corralation between Zhejiang JIULI and Eastern Communications
Assuming the 90 days trading horizon Zhejiang JIULI Hi tech is expected to under-perform the Eastern Communications. But the stock apears to be less risky and, when comparing its historical volatility, Zhejiang JIULI Hi tech is 1.96 times less risky than Eastern Communications. The stock trades about -0.33 of its potential returns per unit of risk. The Eastern Communications Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Eastern Communications Co on December 1, 2024 and sell it today you would earn a total of 1.00 from holding Eastern Communications Co or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang JIULI Hi tech vs. Eastern Communications Co
Performance |
| Timeline |
| Zhejiang JIULI Hi |
| Eastern Communications |
Zhejiang JIULI and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang JIULI and Eastern Communications
The main advantage of trading using opposite Zhejiang JIULI and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang JIULI 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.| Zhejiang JIULI vs. State Grid InformationCommunication | Zhejiang JIULI vs. Lander Sports Development | Zhejiang JIULI vs. Jiangsu Jinling Sports | Zhejiang JIULI vs. Tongling Nonferrous Metals |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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