Correlation Between Eit Environmental and Suzhou Xingye
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By analyzing existing cross correlation between Eit Environmental Development and Suzhou Xingye Material, you can compare the effects of market volatilities on Eit Environmental and Suzhou Xingye 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 Suzhou Xingye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Suzhou Xingye.
Diversification Opportunities for Eit Environmental and Suzhou Xingye
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eit and Suzhou is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Suzhou Xingye Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Xingye Material 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 Suzhou Xingye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Xingye Material has no effect on the direction of Eit Environmental i.e., Eit Environmental and Suzhou Xingye go up and down completely randomly.
Pair Corralation between Eit Environmental and Suzhou Xingye
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 0.36 times more return on investment than Suzhou Xingye. However, Eit Environmental Development is 2.75 times less risky than Suzhou Xingye. It trades about 0.27 of its potential returns per unit of risk. Suzhou Xingye Material is currently generating about -0.71 per unit of risk. If you would invest 1,458 in Eit Environmental Development on November 9, 2024 and sell it today you would earn a total of 94.00 from holding Eit Environmental Development or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 12.5% |
| Values | Daily Returns |
Eit Environmental Development vs. Suzhou Xingye Material
Performance |
| Timeline |
| Eit Environmental |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Suzhou Xingye Material |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eit Environmental and Suzhou Xingye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Suzhou Xingye
The main advantage of trading using opposite Eit Environmental and Suzhou Xingye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Suzhou Xingye 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 Suzhou Xingye will offset losses from the drop in Suzhou Xingye's long position.The idea behind Eit Environmental Development and Suzhou Xingye Material pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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