Correlation Between Eit Environmental and Jiangxi Hengda
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By analyzing existing cross correlation between Eit Environmental Development and Jiangxi Hengda Hi Tech, you can compare the effects of market volatilities on Eit Environmental and Jiangxi Hengda 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 Eit Environmental with a short position of Jiangxi Hengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Jiangxi Hengda.
Diversification Opportunities for Eit Environmental and Jiangxi Hengda
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eit and Jiangxi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Jiangxi Hengda Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Hengda Hi and Eit Environmental 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 Eit Environmental Development are associated (or correlated) with Jiangxi Hengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Hengda Hi has no effect on the direction of Eit Environmental i.e., Eit Environmental and Jiangxi Hengda go up and down completely randomly.
Pair Corralation between Eit Environmental and Jiangxi Hengda
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 0.45 times more return on investment than Jiangxi Hengda. However, Eit Environmental Development is 2.22 times less risky than Jiangxi Hengda. It trades about -0.16 of its potential returns per unit of risk. Jiangxi Hengda Hi Tech is currently generating about -0.21 per unit of risk. If you would invest 1,615 in Eit Environmental Development on October 17, 2024 and sell it today you would lose (127.00) from holding Eit Environmental Development or give up 7.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eit Environmental Development vs. Jiangxi Hengda Hi Tech
Performance |
| Timeline |
| Eit Environmental |
| Jiangxi Hengda Hi |
Eit Environmental and Jiangxi Hengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Jiangxi Hengda
The main advantage of trading using opposite Eit Environmental and Jiangxi Hengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Jiangxi Hengda 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 Jiangxi Hengda will offset losses from the drop in Jiangxi Hengda's long position.| Eit Environmental vs. Shandong Rike Chemical | Eit Environmental vs. Jilin Chemical Fibre | Eit Environmental vs. JCHX Mining Management | Eit Environmental vs. Dosilicon Co |
| Jiangxi Hengda vs. Shanghai Action Education | Jiangxi Hengda vs. Gansu Jiu Steel | Jiangxi Hengda vs. Heilongjiang Publishing Media | Jiangxi Hengda vs. Eit Environmental Development |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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