Correlation Between ZongTai Real and Eastern Media
Can any of the company-specific risk be diversified away by investing in both ZongTai Real and Eastern Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ZongTai Real and Eastern Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZongTai Real Estate and Eastern Media International, you can compare the effects of market volatilities on ZongTai Real and Eastern Media 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 ZongTai Real with a short position of Eastern Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZongTai Real and Eastern Media.
Diversification Opportunities for ZongTai Real and Eastern Media
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZongTai and Eastern is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ZongTai Real Estate and Eastern Media International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Media Intern and ZongTai Real 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 ZongTai Real Estate are associated (or correlated) with Eastern Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Media Intern has no effect on the direction of ZongTai Real i.e., ZongTai Real and Eastern Media go up and down completely randomly.
Pair Corralation between ZongTai Real and Eastern Media
Assuming the 90 days trading horizon ZongTai Real Estate is expected to generate 1.28 times more return on investment than Eastern Media. However, ZongTai Real is 1.28 times more volatile than Eastern Media International. It trades about 0.19 of its potential returns per unit of risk. Eastern Media International is currently generating about 0.0 per unit of risk. If you would invest 3,180 in ZongTai Real Estate on August 23, 2024 and sell it today you would earn a total of 230.00 from holding ZongTai Real Estate or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZongTai Real Estate vs. Eastern Media International
Performance |
| Timeline |
| ZongTai Real Estate |
| Eastern Media Intern |
ZongTai Real and Eastern Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZongTai Real and Eastern Media
The main advantage of trading using opposite ZongTai Real and Eastern Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZongTai Real position performs unexpectedly, Eastern Media 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 Eastern Media will offset losses from the drop in Eastern Media's long position.| ZongTai Real vs. Golden Biotechnology | ZongTai Real vs. K Way Information | ZongTai Real vs. Chung Lien Transportation | ZongTai Real vs. Oceanic Beverages Co |
| Eastern Media vs. Ichia Technologies | Eastern Media vs. Elan Microelectronics Corp | Eastern Media vs. Amtran Technology Co | Eastern Media vs. Sunplus 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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