Correlation Between Eit Environmental and Bank of China
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By analyzing existing cross correlation between Eit Environmental Development and Bank of China, you can compare the effects of market volatilities on Eit Environmental and Bank of China 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 Bank of China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Bank of China.
Diversification Opportunities for Eit Environmental and Bank of China
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eit and Bank is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Bank of China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of China 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 Bank of China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of China has no effect on the direction of Eit Environmental i.e., Eit Environmental and Bank of China go up and down completely randomly.
Pair Corralation between Eit Environmental and Bank of China
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 2.22 times more return on investment than Bank of China. However, Eit Environmental is 2.22 times more volatile than Bank of China. It trades about 0.07 of its potential returns per unit of risk. Bank of China is currently generating about 0.07 per unit of risk. If you would invest 1,262 in Eit Environmental Development on September 3, 2024 and sell it today you would earn a total of 327.00 from holding Eit Environmental Development or generate 25.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eit Environmental Development vs. Bank of China
Performance |
| Timeline |
| Eit Environmental |
| Bank of China |
Eit Environmental and Bank of China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Bank of China
The main advantage of trading using opposite Eit Environmental and Bank of China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Bank of China 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 Bank of China will offset losses from the drop in Bank of China'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 |
| Bank of China vs. Tongyu Communication | Bank of China vs. Guangzhou Haige Communications | Bank of China vs. Everdisplay Optronics Shanghai | Bank of China vs. Wuhan Yangtze Communication |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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