Correlation Between Eit Environmental and Lepu Medical
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By analyzing existing cross correlation between Eit Environmental Development and Lepu Medical Tech, you can compare the effects of market volatilities on Eit Environmental and Lepu Medical 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 Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Lepu Medical.
Diversification Opportunities for Eit Environmental and Lepu Medical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eit and Lepu is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Lepu Medical Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepu Medical Tech 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 Lepu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepu Medical Tech has no effect on the direction of Eit Environmental i.e., Eit Environmental and Lepu Medical go up and down completely randomly.
Pair Corralation between Eit Environmental and Lepu Medical
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 1.62 times more return on investment than Lepu Medical. However, Eit Environmental is 1.62 times more volatile than Lepu Medical Tech. It trades about 0.11 of its potential returns per unit of risk. Lepu Medical Tech is currently generating about -0.01 per unit of risk. If you would invest 1,554 in Eit Environmental Development on September 29, 2024 and sell it today you would earn a total of 69.00 from holding Eit Environmental Development or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eit Environmental Development vs. Lepu Medical Tech
Performance |
| Timeline |
| Eit Environmental |
| Lepu Medical Tech |
Eit Environmental and Lepu Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Lepu Medical
The main advantage of trading using opposite Eit Environmental and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Lepu Medical 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 Lepu Medical will offset losses from the drop in Lepu Medical's long position.| Eit Environmental vs. Ming Yang Smart | Eit Environmental vs. 159681 | Eit Environmental vs. 159005 | Eit Environmental vs. Loctek Ergonomic Technology |
| Lepu Medical vs. Chongqing Changan Automobile | Lepu Medical vs. Malion New Materials | Lepu Medical vs. Cangzhou Mingzhu Plastic | Lepu Medical vs. Dongfeng Automobile 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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