Correlation Between Eastern Communications and Xinjiang Zhongtai
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By analyzing existing cross correlation between Eastern Communications Co and Xinjiang Zhongtai Chemical, you can compare the effects of market volatilities on Eastern Communications and Xinjiang Zhongtai 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 Xinjiang Zhongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Xinjiang Zhongtai.
Diversification Opportunities for Eastern Communications and Xinjiang Zhongtai
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Xinjiang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Xinjiang Zhongtai Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Zhongtai 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 Xinjiang Zhongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Zhongtai has no effect on the direction of Eastern Communications i.e., Eastern Communications and Xinjiang Zhongtai go up and down completely randomly.
Pair Corralation between Eastern Communications and Xinjiang Zhongtai
Assuming the 90 days trading horizon Eastern Communications is expected to generate 2.67 times less return on investment than Xinjiang Zhongtai. In addition to that, Eastern Communications is 1.21 times more volatile than Xinjiang Zhongtai Chemical. It trades about 0.06 of its total potential returns per unit of risk. Xinjiang Zhongtai Chemical is currently generating about 0.18 per unit of volatility. If you would invest 401.00 in Xinjiang Zhongtai Chemical on September 5, 2024 and sell it today you would earn a total of 67.00 from holding Xinjiang Zhongtai Chemical or generate 16.71% 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. Xinjiang Zhongtai Chemical
Performance |
| Timeline |
| Eastern Communications |
| Xinjiang Zhongtai |
Eastern Communications and Xinjiang Zhongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Xinjiang Zhongtai
The main advantage of trading using opposite Eastern Communications and Xinjiang Zhongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Xinjiang Zhongtai 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 Xinjiang Zhongtai will offset losses from the drop in Xinjiang Zhongtai's long position.| Eastern Communications vs. Jiaozuo Wanfang Aluminum | Eastern Communications vs. ZYF Lopsking Aluminum | Eastern Communications vs. Datang HuaYin Electric | Eastern Communications vs. Guangdong Jingyi Metal |
| Xinjiang Zhongtai vs. Zijin Mining Group | Xinjiang Zhongtai vs. Wanhua Chemical Group | Xinjiang Zhongtai vs. Baoshan Iron Steel | Xinjiang Zhongtai vs. Shandong Gold Mining |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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