Correlation Between China Sports and Eit Environmental
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By analyzing existing cross correlation between China Sports Industry and Eit Environmental Development, you can compare the effects of market volatilities on China Sports 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 China Sports with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Eit Environmental.
Diversification Opportunities for China Sports and Eit Environmental
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Eit is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Eit Environmental Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eit Environmental and China Sports 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 China Sports Industry 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 China Sports i.e., China Sports and Eit Environmental go up and down completely randomly.
Pair Corralation between China Sports and Eit Environmental
Assuming the 90 days trading horizon China Sports Industry is expected to under-perform the Eit Environmental. But the stock apears to be less risky and, when comparing its historical volatility, China Sports Industry is 1.26 times less risky than Eit Environmental. The stock trades about -0.01 of its potential returns per unit of risk. The Eit Environmental Development is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,419 in Eit Environmental Development on October 16, 2024 and sell it today you would earn a total of 4.00 from holding Eit Environmental Development or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Sports Industry vs. Eit Environmental Development
Performance |
| Timeline |
| China Sports Industry |
| Eit Environmental |
China Sports and Eit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Sports and Eit Environmental
The main advantage of trading using opposite China Sports and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports 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.| China Sports vs. Guangzhou Haozhi Industrial | China Sports vs. Runjian Communication Co | China Sports vs. Guangxi Wuzhou Communications | China Sports vs. Guangzhou Seagull Kitchen |
| Eit Environmental vs. HeNan Splendor Science | Eit Environmental vs. Xiamen Bank Co | Eit Environmental vs. Yindu Kitchen Equipment | Eit Environmental vs. China Sports Industry |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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