Correlation Between East Money and Road Environment
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By analyzing existing cross correlation between East Money Information and Road Environment Technology, you can compare the effects of market volatilities on East Money and Road Environment 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 East Money with a short position of Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Money and Road Environment.
Diversification Opportunities for East Money and Road Environment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and Road is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding East Money Information and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec and East Money 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 East Money Information are associated (or correlated) with Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of East Money i.e., East Money and Road Environment go up and down completely randomly.
Pair Corralation between East Money and Road Environment
Assuming the 90 days trading horizon East Money Information is expected to under-perform the Road Environment. But the stock apears to be less risky and, when comparing its historical volatility, East Money Information is 1.38 times less risky than Road Environment. The stock trades about -0.28 of its potential returns per unit of risk. The Road Environment Technology is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,424 in Road Environment Technology on October 16, 2024 and sell it today you would lose (148.00) from holding Road Environment Technology or give up 10.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Money Information vs. Road Environment Technology
Performance |
| Timeline |
| East Money Information |
| Road Environment Tec |
East Money and Road Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Money and Road Environment
The main advantage of trading using opposite East Money and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Money position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment's long position.| East Money vs. GuoChuang Software Co | East Money vs. Chongqing Shunbo Aluminum | East Money vs. Jiaozuo Wanfang Aluminum | East Money vs. Dhc Software Co |
| Road Environment vs. New Hope Dairy | Road Environment vs. V V Food | Road Environment vs. Harbin Hatou Investment | Road Environment vs. Shanghai Ziyan Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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