Correlation Between Sichuan Hebang and Eastern Communications
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By analyzing existing cross correlation between Sichuan Hebang Biotechnology and Eastern Communications Co, you can compare the effects of market volatilities on Sichuan Hebang 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 Sichuan Hebang with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Hebang and Eastern Communications.
Diversification Opportunities for Sichuan Hebang and Eastern Communications
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sichuan and Eastern is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Hebang Biotechnology and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Sichuan Hebang 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 Sichuan Hebang Biotechnology 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 Sichuan Hebang i.e., Sichuan Hebang and Eastern Communications go up and down completely randomly.
Pair Corralation between Sichuan Hebang and Eastern Communications
Assuming the 90 days trading horizon Sichuan Hebang Biotechnology is expected to under-perform the Eastern Communications. But the stock apears to be less risky and, when comparing its historical volatility, Sichuan Hebang Biotechnology is 1.26 times less risky than Eastern Communications. The stock trades about -0.05 of its potential returns per unit of risk. The Eastern Communications Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Eastern Communications Co on October 26, 2024 and sell it today you would lose (1.00) from holding Eastern Communications Co or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Hebang Biotechnology vs. Eastern Communications Co
Performance |
| Timeline |
| Sichuan Hebang Biote |
| Eastern Communications |
Sichuan Hebang and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Hebang and Eastern Communications
The main advantage of trading using opposite Sichuan Hebang and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Hebang 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.| Sichuan Hebang vs. Longmaster Information Tech | Sichuan Hebang vs. Shanghai Yanpu Metal | Sichuan Hebang vs. Anhui Transport Consulting | Sichuan Hebang vs. Bonree Data Technology |
| Eastern Communications vs. Bus Online Co | Eastern Communications vs. Holitech Technology Co | Eastern Communications vs. Gome Telecom Equipment | Eastern Communications vs. Cultural Investment Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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