Correlation Between Eit Environmental and Zhejiang Orient
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By analyzing existing cross correlation between Eit Environmental Development and Zhejiang Orient Gene, you can compare the effects of market volatilities on Eit Environmental and Zhejiang Orient 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 Zhejiang Orient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Zhejiang Orient.
Diversification Opportunities for Eit Environmental and Zhejiang Orient
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eit and Zhejiang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Zhejiang Orient Gene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Orient Gene 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 Zhejiang Orient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Orient Gene has no effect on the direction of Eit Environmental i.e., Eit Environmental and Zhejiang Orient go up and down completely randomly.
Pair Corralation between Eit Environmental and Zhejiang Orient
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 1.17 times more return on investment than Zhejiang Orient. However, Eit Environmental is 1.17 times more volatile than Zhejiang Orient Gene. It trades about 0.04 of its potential returns per unit of risk. Zhejiang Orient Gene is currently generating about -0.1 per unit of risk. If you would invest 1,520 in Eit Environmental Development on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Eit Environmental Development or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eit Environmental Development vs. Zhejiang Orient Gene
Performance |
| Timeline |
| Eit Environmental |
| Zhejiang Orient Gene |
Eit Environmental and Zhejiang Orient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eit Environmental and Zhejiang Orient
The main advantage of trading using opposite Eit Environmental and Zhejiang Orient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Zhejiang Orient 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 Zhejiang Orient will offset losses from the drop in Zhejiang Orient's long position.| Eit Environmental vs. Dhc Software Co | Eit Environmental vs. Guangzhou Dongfang Hotel | Eit Environmental vs. Xilinmen Furniture Co | Eit Environmental vs. Huatian Hotel Group |
| Zhejiang Orient vs. JCHX Mining Management | Zhejiang Orient vs. Western Mining Co | Zhejiang Orient vs. Guangdong Xiongsu Technology | Zhejiang Orient vs. Sinofibers Technology 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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