Correlation Between New Hope and Eastern Communications
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By analyzing existing cross correlation between New Hope Dairy and Eastern Communications Co, you can compare the effects of market volatilities on New Hope 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 New Hope with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Eastern Communications.
Diversification Opportunities for New Hope and Eastern Communications
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Eastern is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and New Hope 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 New Hope Dairy 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 New Hope i.e., New Hope and Eastern Communications go up and down completely randomly.
Pair Corralation between New Hope and Eastern Communications
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 1.03 times more return on investment than Eastern Communications. However, New Hope is 1.03 times more volatile than Eastern Communications Co. It trades about 0.01 of its potential returns per unit of risk. Eastern Communications Co is currently generating about -0.03 per unit of risk. If you would invest 1,229 in New Hope Dairy on August 27, 2024 and sell it today you would earn a total of 0.00 from holding New Hope Dairy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Eastern Communications Co
Performance |
| Timeline |
| New Hope Dairy |
| Eastern Communications |
New Hope and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Eastern Communications
The main advantage of trading using opposite New Hope and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope 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.| New Hope vs. China Petroleum Chemical | New Hope vs. PetroChina Co Ltd | New Hope vs. China State Construction | New Hope vs. China Railway Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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