Correlation Between Sichuan Jinshi and Eastern Communications
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By analyzing existing cross correlation between Sichuan Jinshi Technology and Eastern Communications Co, you can compare the effects of market volatilities on Sichuan Jinshi 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 Sichuan Jinshi with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Jinshi and Eastern Communications.
Diversification Opportunities for Sichuan Jinshi and Eastern Communications
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sichuan and Eastern is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Jinshi Technology and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Sichuan Jinshi 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 Sichuan Jinshi Technology 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 Sichuan Jinshi i.e., Sichuan Jinshi and Eastern Communications go up and down completely randomly.
Pair Corralation between Sichuan Jinshi and Eastern Communications
Assuming the 90 days trading horizon Sichuan Jinshi Technology is expected to under-perform the Eastern Communications. In addition to that, Sichuan Jinshi is 1.22 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 0.02 per unit of volatility. If you would invest 41.00 in Eastern Communications Co on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Eastern Communications Co or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Jinshi Technology vs. Eastern Communications Co
Performance |
| Timeline |
| Sichuan Jinshi Technology |
| Eastern Communications |
Sichuan Jinshi and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Jinshi and Eastern Communications
The main advantage of trading using opposite Sichuan Jinshi and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Jinshi 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.| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi vs. Rongsheng Petrochemical Co | Sichuan Jinshi vs. Hoshine Silicon Ind |
| Eastern Communications vs. China Sports Industry | Eastern Communications vs. Linzhou Heavy Machinery | Eastern Communications vs. Anhui Huilong Agricultural | Eastern Communications vs. Lutian Machinery Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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