Correlation Between Shandong Polymer and Eastern Communications
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Eastern Communications Co, you can compare the effects of market volatilities on Shandong Polymer 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 Shandong Polymer with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Eastern Communications.
Diversification Opportunities for Shandong Polymer and Eastern Communications
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Eastern is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Shandong Polymer 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 Shandong Polymer Biochemicals 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 Shandong Polymer i.e., Shandong Polymer and Eastern Communications go up and down completely randomly.
Pair Corralation between Shandong Polymer and Eastern Communications
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 1.12 times more return on investment than Eastern Communications. However, Shandong Polymer is 1.12 times more volatile than Eastern Communications Co. It trades about 0.04 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.01 per unit of risk. If you would invest 487.00 in Shandong Polymer Biochemicals on September 14, 2024 and sell it today you would earn a total of 7.00 from holding Shandong Polymer Biochemicals or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Eastern Communications Co
Performance |
| Timeline |
| Shandong Polymer Bio |
| Eastern Communications |
Shandong Polymer and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Eastern Communications
The main advantage of trading using opposite Shandong Polymer and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer 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.| Shandong Polymer vs. Eastern Communications Co | Shandong Polymer vs. Songz Automobile Air | Shandong Polymer vs. China National Software | Shandong Polymer vs. Iat Automobile Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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