Correlation Between Guangdong Shenglu and Eastern Communications
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Eastern Communications Co, you can compare the effects of market volatilities on Guangdong Shenglu 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 Guangdong Shenglu with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Eastern Communications.
Diversification Opportunities for Guangdong Shenglu and Eastern Communications
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Eastern is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication 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 Guangdong Shenglu i.e., Guangdong Shenglu and Eastern Communications go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Eastern Communications
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to under-perform the Eastern Communications. In addition to that, Guangdong Shenglu is 1.19 times more volatile than Eastern Communications Co. It trades about -0.01 of its total potential returns per unit of risk. Eastern Communications Co is currently generating about 0.05 per unit of volatility. If you would invest 42.00 in Eastern Communications Co on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Eastern Communications Co or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Eastern Communications Co
Performance |
| Timeline |
| Guangdong Shenglu |
| Eastern Communications |
Guangdong Shenglu and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Eastern Communications
The main advantage of trading using opposite Guangdong Shenglu and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu 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.| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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