Correlation Between Wuhan Yangtze and Eastern Communications
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By analyzing existing cross correlation between Wuhan Yangtze Communication and Eastern Communications Co, you can compare the effects of market volatilities on Wuhan Yangtze and Eastern Communications 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 Wuhan Yangtze with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and Eastern Communications.
Diversification Opportunities for Wuhan Yangtze and Eastern Communications
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wuhan and Eastern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Wuhan Yangtze 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 Wuhan Yangtze Communication are associated (or correlated) with Eastern Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Communications has no effect on the direction of Wuhan Yangtze i.e., Wuhan Yangtze and Eastern Communications go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and Eastern Communications
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 2.54 times more return on investment than Eastern Communications. However, Wuhan Yangtze is 2.54 times more volatile than Eastern Communications Co. It trades about 0.33 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.05 per unit of risk. If you would invest 1,941 in Wuhan Yangtze Communication on September 1, 2024 and sell it today you would earn a total of 1,028 from holding Wuhan Yangtze Communication or generate 52.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. Eastern Communications Co
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| Eastern Communications |
Wuhan Yangtze and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and Eastern Communications
The main advantage of trading using opposite Wuhan Yangtze and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze position performs unexpectedly, Eastern Communications 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 Communications will offset losses from the drop in Eastern Communications' long position.| Wuhan Yangtze vs. Industrial and Commercial | Wuhan Yangtze vs. Kweichow Moutai Co | Wuhan Yangtze vs. Agricultural Bank of | Wuhan Yangtze vs. China Mobile Limited |
| Eastern Communications vs. Wuxi Chemical Equipment | Eastern Communications vs. Yangmei Chemical Co | Eastern Communications vs. Lander Sports Development | Eastern Communications vs. Jiangsu Jinling Sports |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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