Correlation Between Eastroc Beverage and Luolai Home
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By analyzing existing cross correlation between Eastroc Beverage Group and Luolai Home Textile, you can compare the effects of market volatilities on Eastroc Beverage and Luolai Home 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 Eastroc Beverage with a short position of Luolai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastroc Beverage and Luolai Home.
Diversification Opportunities for Eastroc Beverage and Luolai Home
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastroc and Luolai is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eastroc Beverage Group and Luolai Home Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luolai Home Textile and Eastroc Beverage 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 Eastroc Beverage Group are associated (or correlated) with Luolai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luolai Home Textile has no effect on the direction of Eastroc Beverage i.e., Eastroc Beverage and Luolai Home go up and down completely randomly.
Pair Corralation between Eastroc Beverage and Luolai Home
Assuming the 90 days trading horizon Eastroc Beverage Group is expected to generate 0.63 times more return on investment than Luolai Home. However, Eastroc Beverage Group is 1.58 times less risky than Luolai Home. It trades about 0.31 of its potential returns per unit of risk. Luolai Home Textile is currently generating about -0.22 per unit of risk. If you would invest 25,127 in Eastroc Beverage Group on October 14, 2024 and sell it today you would earn a total of 2,569 from holding Eastroc Beverage Group or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastroc Beverage Group vs. Luolai Home Textile
Performance |
| Timeline |
| Eastroc Beverage |
| Luolai Home Textile |
Eastroc Beverage and Luolai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastroc Beverage and Luolai Home
The main advantage of trading using opposite Eastroc Beverage and Luolai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastroc Beverage position performs unexpectedly, Luolai Home 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 Luolai Home will offset losses from the drop in Luolai Home's long position.| Eastroc Beverage vs. Hunan Mendale Hometextile | Eastroc Beverage vs. Qumei Furniture Group | Eastroc Beverage vs. DO Home Collection | Eastroc Beverage vs. Luolai Home Textile |
| Luolai Home vs. State Grid InformationCommunication | Luolai Home vs. Eastroc Beverage Group | Luolai Home vs. Ligao Foods CoLtd | Luolai Home vs. Sunwave Communications 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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