Correlation Between Eastern Communications and Zhengzhou Qianweiyangchu
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By analyzing existing cross correlation between Eastern Communications Co and Zhengzhou Qianweiyangchu Food, you can compare the effects of market volatilities on Eastern Communications and Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Zhengzhou Qianweiyangchu.
Diversification Opportunities for Eastern Communications and Zhengzhou Qianweiyangchu
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Zhengzhou is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Zhengzhou Qianweiyangchu Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengzhou Qianweiyangchu has no effect on the direction of Eastern Communications i.e., Eastern Communications and Zhengzhou Qianweiyangchu go up and down completely randomly.
Pair Corralation between Eastern Communications and Zhengzhou Qianweiyangchu
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.8 times more return on investment than Zhengzhou Qianweiyangchu. However, Eastern Communications Co is 1.25 times less risky than Zhengzhou Qianweiyangchu. It trades about 0.02 of its potential returns per unit of risk. Zhengzhou Qianweiyangchu Food is currently generating about -0.04 per unit of risk. If you would invest 40.00 in Eastern Communications Co on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Eastern Communications Co or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. Zhengzhou Qianweiyangchu Food
Performance |
| Timeline |
| Eastern Communications |
| Zhengzhou Qianweiyangchu |
Eastern Communications and Zhengzhou Qianweiyangchu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Zhengzhou Qianweiyangchu
The main advantage of trading using opposite Eastern Communications and Zhengzhou Qianweiyangchu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Zhengzhou Qianweiyangchu 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 Zhengzhou Qianweiyangchu will offset losses from the drop in Zhengzhou Qianweiyangchu'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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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