Correlation Between ECHO INVESTMENT and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both ECHO INVESTMENT and ZhongAn Online 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 ECHO INVESTMENT and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECHO INVESTMENT ZY and ZhongAn Online P, you can compare the effects of market volatilities on ECHO INVESTMENT and ZhongAn Online 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 ECHO INVESTMENT with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECHO INVESTMENT and ZhongAn Online.
Diversification Opportunities for ECHO INVESTMENT and ZhongAn Online
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECHO and ZhongAn is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ECHO INVESTMENT ZY and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and ECHO INVESTMENT 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 ECHO INVESTMENT ZY are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of ECHO INVESTMENT i.e., ECHO INVESTMENT and ZhongAn Online go up and down completely randomly.
Pair Corralation between ECHO INVESTMENT and ZhongAn Online
Assuming the 90 days horizon ECHO INVESTMENT ZY is expected to generate 1.45 times more return on investment than ZhongAn Online. However, ECHO INVESTMENT is 1.45 times more volatile than ZhongAn Online P. It trades about 0.19 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.51 per unit of risk. If you would invest 101.00 in ECHO INVESTMENT ZY on October 11, 2024 and sell it today you would earn a total of 8.00 from holding ECHO INVESTMENT ZY or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
ECHO INVESTMENT ZY vs. ZhongAn Online P
Performance |
| Timeline |
| ECHO INVESTMENT ZY |
| ZhongAn Online P |
ECHO INVESTMENT and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECHO INVESTMENT and ZhongAn Online
The main advantage of trading using opposite ECHO INVESTMENT and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECHO INVESTMENT position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| ECHO INVESTMENT vs. Coor Service Management | ECHO INVESTMENT vs. Titan Machinery | ECHO INVESTMENT vs. Q2M Managementberatung AG | ECHO INVESTMENT vs. AGF Management Limited |
| ZhongAn Online vs. STMICROELECTRONICS | ZhongAn Online vs. ECHO INVESTMENT ZY | ZhongAn Online vs. AOI Electronics Co | ZhongAn Online vs. Renesas Electronics |
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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