Correlation Between Eastern Communications and Sichuan Jinshi
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By analyzing existing cross correlation between Eastern Communications Co and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Eastern Communications and Sichuan Jinshi 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 Sichuan Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Sichuan Jinshi.
Diversification Opportunities for Eastern Communications and Sichuan Jinshi
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Sichuan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi Technology 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 Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Eastern Communications i.e., Eastern Communications and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Eastern Communications and Sichuan Jinshi
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.82 times more return on investment than Sichuan Jinshi. However, Eastern Communications Co is 1.22 times less risky than Sichuan Jinshi. It trades about 0.02 of its potential returns per unit of risk. Sichuan Jinshi Technology is currently generating about -0.01 per unit of risk. If you would invest 41.00 in Eastern Communications Co on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Eastern Communications Co or generate 4.88% 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. Sichuan Jinshi Technology
Performance |
| Timeline |
| Eastern Communications |
| Sichuan Jinshi Technology |
Eastern Communications and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Sichuan Jinshi
The main advantage of trading using opposite Eastern Communications and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Sichuan Jinshi 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 Sichuan Jinshi will offset losses from the drop in Sichuan Jinshi's long position.| Eastern Communications vs. China Sports Industry | Eastern Communications vs. Linzhou Heavy Machinery | Eastern Communications vs. Anhui Huilong Agricultural | Eastern Communications vs. Lutian Machinery Co |
| Sichuan Jinshi vs. Zijin Mining Group | Sichuan Jinshi vs. Baoshan Iron Steel | Sichuan Jinshi vs. Rongsheng Petrochemical Co | Sichuan Jinshi vs. Hoshine Silicon Ind |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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