Correlation Between Eit Environmental and China National
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By analyzing existing cross correlation between Eit Environmental Development and China National Software, you can compare the effects of market volatilities on Eit Environmental and China National 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 China National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and China National.
Diversification Opportunities for Eit Environmental and China National
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eit and China is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and China National Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Software 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 China National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Software has no effect on the direction of Eit Environmental i.e., Eit Environmental and China National go up and down completely randomly.
Pair Corralation between Eit Environmental and China National
Assuming the 90 days trading horizon Eit Environmental is expected to generate 4.53 times less return on investment than China National. But when comparing it to its historical volatility, Eit Environmental Development is 1.41 times less risky than China National. It trades about 0.05 of its potential returns per unit of risk. China National Software is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,612 in China National Software on August 31, 2024 and sell it today you would earn a total of 934.00 from holding China National Software or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eit Environmental Development vs. China National Software
Performance |
| Timeline |
| Eit Environmental |
| China National Software |
Eit Environmental and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and China National
The main advantage of trading using opposite Eit Environmental and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, China National 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 China National will offset losses from the drop in China National's long position.| Eit Environmental vs. Cultural Investment Holdings | Eit Environmental vs. Gome Telecom Equipment | Eit Environmental vs. Bus Online Co | Eit Environmental vs. Holitech Technology Co |
| China National vs. Kweichow Moutai Co | China National vs. NAURA Technology Group | China National vs. APT Medical | China National vs. Contemporary Amperex Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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