Correlation Between AIMA Technology and Eastern Communications
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By analyzing existing cross correlation between AIMA Technology Group and Eastern Communications Co, you can compare the effects of market volatilities on AIMA Technology 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 AIMA Technology with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIMA Technology and Eastern Communications.
Diversification Opportunities for AIMA Technology and Eastern Communications
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIMA and Eastern is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AIMA Technology Group and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and AIMA Technology 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 AIMA Technology Group 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 AIMA Technology i.e., AIMA Technology and Eastern Communications go up and down completely randomly.
Pair Corralation between AIMA Technology and Eastern Communications
Assuming the 90 days trading horizon AIMA Technology is expected to generate 1.78 times less return on investment than Eastern Communications. In addition to that, AIMA Technology is 1.14 times more volatile than Eastern Communications Co. It trades about 0.08 of its total potential returns per unit of risk. Eastern Communications Co is currently generating about 0.17 per unit of volatility. If you would invest 36.00 in Eastern Communications Co on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Eastern Communications Co or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIMA Technology Group vs. Eastern Communications Co
Performance |
| Timeline |
| AIMA Technology Group |
| Eastern Communications |
AIMA Technology and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIMA Technology and Eastern Communications
The main advantage of trading using opposite AIMA Technology and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIMA Technology 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.| AIMA Technology vs. Eastern Communications Co | AIMA Technology vs. Shenyang Huitian Thermal | AIMA Technology vs. StarPower Semiconductor | AIMA Technology vs. Nexchip Semiconductor Corp |
| Eastern Communications vs. Guangdong Jinma Entertainment | Eastern Communications vs. Huaibei Mining Holdings | Eastern Communications vs. Zijin Mining Group | Eastern Communications vs. Xinjiang Baodi Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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