Correlation Between Eastern Communications and Luzhou Lao
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By analyzing existing cross correlation between Eastern Communications Co and Luzhou Lao Jiao, you can compare the effects of market volatilities on Eastern Communications and Luzhou Lao 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 Eastern Communications with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Luzhou Lao.
Diversification Opportunities for Eastern Communications and Luzhou Lao
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Luzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and Eastern Communications 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 Eastern Communications Co are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of Eastern Communications i.e., Eastern Communications and Luzhou Lao go up and down completely randomly.
Pair Corralation between Eastern Communications and Luzhou Lao
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.93 times more return on investment than Luzhou Lao. However, Eastern Communications Co is 1.08 times less risky than Luzhou Lao. It trades about 0.02 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about -0.02 per unit of risk. If you would invest 41.00 in Eastern Communications Co on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Eastern Communications Co or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Eastern Communications Co vs. Luzhou Lao Jiao
Performance |
| Timeline |
| Eastern Communications |
| Luzhou Lao Jiao |
Eastern Communications and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Luzhou Lao
The main advantage of trading using opposite Eastern Communications and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| Eastern Communications vs. Industrial and Commercial | Eastern Communications vs. China Construction Bank | Eastern Communications vs. Bank of China | Eastern Communications vs. Agricultural Bank of |
| Luzhou Lao vs. Tianjin Pengling Rubber | Luzhou Lao vs. Hangzhou Gaoxin Rubber | Luzhou Lao vs. Eastroc Beverage Group | Luzhou Lao vs. Guangzhou Zhujiang Brewery |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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