Correlation Between Changchun Faway and Eastern Communications
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By analyzing existing cross correlation between Changchun Faway Automobile and Eastern Communications Co, you can compare the effects of market volatilities on Changchun Faway 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 Changchun Faway with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Eastern Communications.
Diversification Opportunities for Changchun Faway and Eastern Communications
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Eastern is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Changchun Faway 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 Changchun Faway Automobile 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 Changchun Faway i.e., Changchun Faway and Eastern Communications go up and down completely randomly.
Pair Corralation between Changchun Faway and Eastern Communications
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.92 times more return on investment than Eastern Communications. However, Changchun Faway Automobile is 1.09 times less risky than Eastern Communications. It trades about 0.09 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 904.00 in Changchun Faway Automobile on September 1, 2024 and sell it today you would earn a total of 39.00 from holding Changchun Faway Automobile or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Eastern Communications Co
Performance |
| Timeline |
| Changchun Faway Auto |
| Eastern Communications |
Changchun Faway and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Eastern Communications
The main advantage of trading using opposite Changchun Faway and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway 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.| Changchun Faway vs. Hefei Metalforming Mach | Changchun Faway vs. Shanghai Jinfeng Wine | Changchun Faway vs. Anhui Gujing Distillery | Changchun Faway vs. Duzhe Publishing Media |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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