Correlation Between Eastern Communications and Guangdong Shenglu
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By analyzing existing cross correlation between Eastern Communications Co and Guangdong Shenglu Telecommunication, you can compare the effects of market volatilities on Eastern Communications and Guangdong Shenglu 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 Guangdong Shenglu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Guangdong Shenglu.
Diversification Opportunities for Eastern Communications and Guangdong Shenglu
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and Guangdong is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Guangdong Shenglu Telecommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Shenglu 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 Guangdong Shenglu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Shenglu has no effect on the direction of Eastern Communications i.e., Eastern Communications and Guangdong Shenglu go up and down completely randomly.
Pair Corralation between Eastern Communications and Guangdong Shenglu
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.84 times more return on investment than Guangdong Shenglu. However, Eastern Communications Co is 1.19 times less risky than Guangdong Shenglu. It trades about 0.05 of its potential returns per unit of risk. Guangdong Shenglu Telecommunication is currently generating about -0.01 per unit of risk. If you would invest 42.00 in Eastern Communications Co on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Eastern Communications Co or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. Guangdong Shenglu Telecommunic
Performance |
| Timeline |
| Eastern Communications |
| Guangdong Shenglu |
Eastern Communications and Guangdong Shenglu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Guangdong Shenglu
The main advantage of trading using opposite Eastern Communications and Guangdong Shenglu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Guangdong Shenglu 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 Guangdong Shenglu will offset losses from the drop in Guangdong Shenglu's long position.| Eastern Communications vs. Guangdong Jinma Entertainment | Eastern Communications vs. Huaibei Mining Holdings | Eastern Communications vs. Zijin Mining Group | Eastern Communications vs. Xinjiang Baodi Mining |
| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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