Correlation Between Elite Color and Eastern Communications
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By analyzing existing cross correlation between Elite Color Environmental and Eastern Communications Co, you can compare the effects of market volatilities on Elite Color 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 Elite Color with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Color and Eastern Communications.
Diversification Opportunities for Elite Color and Eastern Communications
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elite and Eastern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Elite Color Environmental and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Elite Color 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 Elite Color Environmental 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 Elite Color i.e., Elite Color and Eastern Communications go up and down completely randomly.
Pair Corralation between Elite Color and Eastern Communications
Assuming the 90 days trading horizon Elite Color is expected to generate 2.32 times less return on investment than Eastern Communications. But when comparing it to its historical volatility, Elite Color Environmental is 1.76 times less risky than Eastern Communications. It trades about 0.05 of its potential returns per unit of risk. 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Color Environmental vs. Eastern Communications Co
Performance |
| Timeline |
| Elite Color Environmental |
| Eastern Communications |
Elite Color and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Color and Eastern Communications
The main advantage of trading using opposite Elite Color and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Color 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.| Elite Color vs. Dongfeng Automobile Co | Elite Color vs. Zotye Automobile Co | Elite Color vs. Goldlok Toys Holdings | Elite Color vs. Shenzhen Zqgame |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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