Correlation Between Eit Environmental and Tongxing Environmental
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By analyzing existing cross correlation between Eit Environmental Development and Tongxing Environmental Protection, you can compare the effects of market volatilities on Eit Environmental and Tongxing 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 Eit Environmental with a short position of Tongxing Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Tongxing Environmental.
Diversification Opportunities for Eit Environmental and Tongxing Environmental
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eit and Tongxing is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Tongxing Environmental Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxing Environmental 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 Tongxing Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxing Environmental has no effect on the direction of Eit Environmental i.e., Eit Environmental and Tongxing Environmental go up and down completely randomly.
Pair Corralation between Eit Environmental and Tongxing Environmental
Assuming the 90 days trading horizon Eit Environmental Development is expected to under-perform the Tongxing Environmental. In addition to that, Eit Environmental is 1.05 times more volatile than Tongxing Environmental Protection. It trades about 0.0 of its total potential returns per unit of risk. Tongxing Environmental Protection is currently generating about 0.13 per unit of volatility. If you would invest 1,436 in Tongxing Environmental Protection on August 29, 2024 and sell it today you would earn a total of 143.00 from holding Tongxing Environmental Protection or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eit Environmental Development vs. Tongxing Environmental Protect
Performance |
| Timeline |
| Eit Environmental |
| Tongxing Environmental |
Eit Environmental and Tongxing Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Tongxing Environmental
The main advantage of trading using opposite Eit Environmental and Tongxing Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Tongxing 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 Tongxing Environmental will offset losses from the drop in Tongxing Environmental's long position.| Eit Environmental vs. China Petroleum Chemical | Eit Environmental vs. PetroChina Co Ltd | Eit Environmental vs. China State Construction | Eit Environmental vs. China Railway Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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