Correlation Between Xilinmen Furniture and Eit Environmental
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By analyzing existing cross correlation between Xilinmen Furniture Co and Eit Environmental Development, you can compare the effects of market volatilities on Xilinmen Furniture 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 Xilinmen Furniture with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xilinmen Furniture and Eit Environmental.
Diversification Opportunities for Xilinmen Furniture and Eit Environmental
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xilinmen and Eit is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xilinmen Furniture 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 Xilinmen Furniture 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 Xilinmen Furniture 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 Xilinmen Furniture i.e., Xilinmen Furniture and Eit Environmental go up and down completely randomly.
Pair Corralation between Xilinmen Furniture and Eit Environmental
Assuming the 90 days trading horizon Xilinmen Furniture Co is expected to under-perform the Eit Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Xilinmen Furniture Co is 1.03 times less risky than Eit Environmental. The stock trades about -0.03 of its potential returns per unit of risk. The Eit Environmental Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,267 in Eit Environmental Development on September 3, 2024 and sell it today you would earn a total of 289.00 from holding Eit Environmental Development or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xilinmen Furniture Co vs. Eit Environmental Development
Performance |
| Timeline |
| Xilinmen Furniture |
| Eit Environmental |
Xilinmen Furniture and Eit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xilinmen Furniture and Eit Environmental
The main advantage of trading using opposite Xilinmen Furniture and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xilinmen Furniture 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.| Xilinmen Furniture vs. Tongxing Environmental Protection | Xilinmen Furniture vs. Ningbo Ligong Online | Xilinmen Furniture vs. Guangdong Advertising Co | Xilinmen Furniture vs. Bengang Steel Plates |
| Eit Environmental vs. Cultural Investment Holdings | Eit Environmental vs. Gome Telecom Equipment | Eit Environmental vs. Bus Online Co | Eit Environmental vs. Holitech Technology Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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