Correlation Between Chongqing Brewery and Eit Environmental
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By analyzing existing cross correlation between Chongqing Brewery Co and Eit Environmental Development, you can compare the effects of market volatilities on Chongqing Brewery and Eit Environmental 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 Chongqing Brewery with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Eit Environmental.
Diversification Opportunities for Chongqing Brewery and Eit Environmental
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chongqing and Eit is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co and Eit Environmental Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eit Environmental and Chongqing Brewery 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 Chongqing Brewery Co are associated (or correlated) with Eit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eit Environmental has no effect on the direction of Chongqing Brewery i.e., Chongqing Brewery and Eit Environmental go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Eit Environmental
Assuming the 90 days trading horizon Chongqing Brewery is expected to generate 1.86 times less return on investment than Eit Environmental. But when comparing it to its historical volatility, Chongqing Brewery Co is 1.3 times less risky than Eit Environmental. It trades about 0.02 of its potential returns per unit of risk. Eit Environmental Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,450 in Eit Environmental Development on September 12, 2024 and sell it today you would earn a total of 224.00 from holding Eit Environmental Development or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Eit Environmental Development
Performance |
| Timeline |
| Chongqing Brewery |
| Eit Environmental |
Chongqing Brewery and Eit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Eit Environmental
The main advantage of trading using opposite Chongqing Brewery and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery position performs unexpectedly, Eit Environmental 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 Eit Environmental will offset losses from the drop in Eit Environmental's long position.| Chongqing Brewery vs. China Petroleum Chemical | Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. China State Construction | Chongqing Brewery vs. China Railway Group |
| Eit Environmental vs. Agricultural Bank of | Eit Environmental vs. Industrial and Commercial | Eit Environmental vs. Bank of China | Eit Environmental vs. PetroChina Co Ltd |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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