Correlation Between Shanghai Baosight and Eastern Communications
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By analyzing existing cross correlation between Shanghai Baosight Software and Eastern Communications Co, you can compare the effects of market volatilities on Shanghai Baosight 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 Shanghai Baosight with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Baosight and Eastern Communications.
Diversification Opportunities for Shanghai Baosight and Eastern Communications
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Eastern is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Baosight Software and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Shanghai Baosight 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 Shanghai Baosight Software 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 Shanghai Baosight i.e., Shanghai Baosight and Eastern Communications go up and down completely randomly.
Pair Corralation between Shanghai Baosight and Eastern Communications
Assuming the 90 days trading horizon Shanghai Baosight Software is expected to under-perform the Eastern Communications. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Baosight Software is 1.1 times less risky than Eastern Communications. The stock trades about -0.07 of its potential returns per unit of risk. The Eastern Communications Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Eastern Communications Co on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Eastern Communications Co or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Baosight Software vs. Eastern Communications Co
Performance |
| Timeline |
| Shanghai Baosight |
| Eastern Communications |
Shanghai Baosight and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Baosight and Eastern Communications
The main advantage of trading using opposite Shanghai Baosight and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Baosight 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.| Shanghai Baosight vs. Eastern Communications Co | Shanghai Baosight vs. Huasi Agricultural Development | Shanghai Baosight vs. ChengDu Hi Tech Development | Shanghai Baosight vs. Tianjin Hi Tech Development |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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