Correlation Between Eastern Communications and Shenyang Huitian
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By analyzing existing cross correlation between Eastern Communications Co and Shenyang Huitian Thermal, you can compare the effects of market volatilities on Eastern Communications and Shenyang Huitian 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 Shenyang Huitian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Shenyang Huitian.
Diversification Opportunities for Eastern Communications and Shenyang Huitian
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Shenyang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Shenyang Huitian Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyang Huitian Thermal 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 Shenyang Huitian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyang Huitian Thermal has no effect on the direction of Eastern Communications i.e., Eastern Communications and Shenyang Huitian go up and down completely randomly.
Pair Corralation between Eastern Communications and Shenyang Huitian
Assuming the 90 days trading horizon Eastern Communications is expected to generate 4.79 times less return on investment than Shenyang Huitian. But when comparing it to its historical volatility, Eastern Communications Co is 1.21 times less risky than Shenyang Huitian. It trades about 0.01 of its potential returns per unit of risk. Shenyang Huitian Thermal is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 241.00 in Shenyang Huitian Thermal on September 1, 2024 and sell it today you would earn a total of 129.00 from holding Shenyang Huitian Thermal or generate 53.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Eastern Communications Co vs. Shenyang Huitian Thermal
Performance |
| Timeline |
| Eastern Communications |
| Shenyang Huitian Thermal |
Eastern Communications and Shenyang Huitian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Shenyang Huitian
The main advantage of trading using opposite Eastern Communications and Shenyang Huitian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Shenyang Huitian 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 Shenyang Huitian will offset losses from the drop in Shenyang Huitian's long position.| Eastern Communications vs. Wuxi Chemical Equipment | Eastern Communications vs. Yangmei Chemical Co | Eastern Communications vs. Lander Sports Development | Eastern Communications vs. Jiangsu Jinling Sports |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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