Correlation Between Eastern Communications and Jointo Energy
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By analyzing existing cross correlation between Eastern Communications Co and Jointo Energy Investment, you can compare the effects of market volatilities on Eastern Communications and Jointo Energy 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 Jointo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Jointo Energy.
Diversification Opportunities for Eastern Communications and Jointo Energy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastern and Jointo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Jointo Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jointo Energy Investment 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 Jointo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jointo Energy Investment has no effect on the direction of Eastern Communications i.e., Eastern Communications and Jointo Energy go up and down completely randomly.
Pair Corralation between Eastern Communications and Jointo Energy
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.59 times more return on investment than Jointo Energy. However, Eastern Communications Co is 1.68 times less risky than Jointo Energy. It trades about -0.2 of its potential returns per unit of risk. Jointo Energy Investment is currently generating about -0.13 per unit of risk. If you would invest 42.00 in Eastern Communications Co on October 15, 2024 and sell it today you would lose (4.00) from holding Eastern Communications Co or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. Jointo Energy Investment
Performance |
| Timeline |
| Eastern Communications |
| Jointo Energy Investment |
Eastern Communications and Jointo Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Jointo Energy
The main advantage of trading using opposite Eastern Communications and Jointo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Jointo Energy 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 Jointo Energy will offset losses from the drop in Jointo Energy's long position.The idea behind Eastern Communications Co and Jointo Energy Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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