Correlation Between Eit Environmental and Shandong Iron
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By analyzing existing cross correlation between Eit Environmental Development and Shandong Iron and, you can compare the effects of market volatilities on Eit Environmental and Shandong Iron 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 Shandong Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Shandong Iron.
Diversification Opportunities for Eit Environmental and Shandong Iron
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eit and Shandong is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Shandong Iron and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Iron 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 Shandong Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Iron has no effect on the direction of Eit Environmental i.e., Eit Environmental and Shandong Iron go up and down completely randomly.
Pair Corralation between Eit Environmental and Shandong Iron
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 1.53 times more return on investment than Shandong Iron. However, Eit Environmental is 1.53 times more volatile than Shandong Iron and. It trades about 0.03 of its potential returns per unit of risk. Shandong Iron and is currently generating about -0.01 per unit of risk. If you would invest 1,274 in Eit Environmental Development on October 25, 2024 and sell it today you would earn a total of 227.00 from holding Eit Environmental Development or generate 17.82% 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. Shandong Iron and
Performance |
| Timeline |
| Eit Environmental |
| Shandong Iron |
Eit Environmental and Shandong Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Shandong Iron
The main advantage of trading using opposite Eit Environmental and Shandong Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Shandong Iron 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 Shandong Iron will offset losses from the drop in Shandong Iron's long position.| Eit Environmental vs. Kweichow Moutai Co | Eit Environmental vs. Contemporary Amperex Technology | Eit Environmental vs. Beijing Roborock Technology | Eit Environmental vs. BYD Co Ltd |
| Shandong Iron vs. Zijin Mining Group | Shandong Iron vs. Wanhua Chemical Group | Shandong Iron vs. Baoshan Iron Steel | Shandong Iron vs. Rongsheng Petrochemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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