Correlation Between Guangzhou Fangbang and Eastern Communications
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By analyzing existing cross correlation between Guangzhou Fangbang Electronics and Eastern Communications Co, you can compare the effects of market volatilities on Guangzhou Fangbang 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 Guangzhou Fangbang with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Fangbang and Eastern Communications.
Diversification Opportunities for Guangzhou Fangbang and Eastern Communications
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Eastern is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Fangbang Electronics and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Guangzhou Fangbang 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 Guangzhou Fangbang Electronics 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 Guangzhou Fangbang i.e., Guangzhou Fangbang and Eastern Communications go up and down completely randomly.
Pair Corralation between Guangzhou Fangbang and Eastern Communications
Assuming the 90 days trading horizon Guangzhou Fangbang Electronics is expected to generate 1.88 times more return on investment than Eastern Communications. However, Guangzhou Fangbang is 1.88 times more volatile than Eastern Communications Co. It trades about 0.01 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.0 per unit of risk. If you would invest 4,300 in Guangzhou Fangbang Electronics on October 16, 2024 and sell it today you would lose (802.00) from holding Guangzhou Fangbang Electronics or give up 18.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Fangbang Electronics vs. Eastern Communications Co
Performance |
| Timeline |
| Guangzhou Fangbang |
| Eastern Communications |
Guangzhou Fangbang and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Fangbang and Eastern Communications
The main advantage of trading using opposite Guangzhou Fangbang and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Fangbang 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.| Guangzhou Fangbang vs. Songz Automobile Air | Guangzhou Fangbang vs. Jiangsu Jinling Sports | Guangzhou Fangbang vs. Dongfeng Automobile Co | Guangzhou Fangbang vs. Iat Automobile Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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