Correlation Between Shandong Rike and Eit Environmental
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By analyzing existing cross correlation between Shandong Rike Chemical and Eit Environmental Development, you can compare the effects of market volatilities on Shandong Rike and Eit Environmental 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 Rike with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Eit Environmental.
Diversification Opportunities for Shandong Rike and Eit Environmental
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Eit is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Eit Environmental Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eit Environmental and Shandong Rike 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 Rike Chemical are associated (or correlated) with Eit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eit Environmental has no effect on the direction of Shandong Rike i.e., Shandong Rike and Eit Environmental go up and down completely randomly.
Pair Corralation between Shandong Rike and Eit Environmental
Assuming the 90 days trading horizon Shandong Rike Chemical is expected to generate 1.7 times more return on investment than Eit Environmental. However, Shandong Rike is 1.7 times more volatile than Eit Environmental Development. It trades about -0.09 of its potential returns per unit of risk. Eit Environmental Development is currently generating about -0.16 per unit of risk. If you would invest 645.00 in Shandong Rike Chemical on October 17, 2024 and sell it today you would lose (55.00) from holding Shandong Rike Chemical or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Rike Chemical vs. Eit Environmental Development
Performance |
| Timeline |
| Shandong Rike Chemical |
| Eit Environmental |
Shandong Rike and Eit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Eit Environmental
The main advantage of trading using opposite Shandong Rike and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Eit Environmental 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 Eit Environmental will offset losses from the drop in Eit Environmental's long position.| Shandong Rike vs. Guizhou BroadcastingTV Info | Shandong Rike vs. Sichuan Fulin Transportation | Shandong Rike vs. Hunan TV Broadcast | Shandong Rike vs. Tongyu Communication |
| Eit Environmental vs. Shandong Rike Chemical | Eit Environmental vs. Jilin Chemical Fibre | Eit Environmental vs. JCHX Mining Management | Eit Environmental vs. Dosilicon 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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