Correlation Between Eastern Communications and Sinofibers Technology
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By analyzing existing cross correlation between Eastern Communications Co and Sinofibers Technology Co, you can compare the effects of market volatilities on Eastern Communications and Sinofibers Technology 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 Sinofibers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Sinofibers Technology.
Diversification Opportunities for Eastern Communications and Sinofibers Technology
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and Sinofibers is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Sinofibers Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinofibers 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 Sinofibers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinofibers Technology has no effect on the direction of Eastern Communications i.e., Eastern Communications and Sinofibers Technology go up and down completely randomly.
Pair Corralation between Eastern Communications and Sinofibers Technology
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.78 times more return on investment than Sinofibers Technology. However, Eastern Communications Co is 1.29 times less risky than Sinofibers Technology. It trades about 0.05 of its potential returns per unit of risk. Sinofibers Technology Co is currently generating about -0.16 per unit of risk. If you would invest 42.00 in Eastern Communications Co on September 1, 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. Sinofibers Technology Co
Performance |
| Timeline |
| Eastern Communications |
| Sinofibers Technology |
Eastern Communications and Sinofibers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Sinofibers Technology
The main advantage of trading using opposite Eastern Communications and Sinofibers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Sinofibers Technology 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 Sinofibers Technology will offset losses from the drop in Sinofibers Technology'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 |
| Sinofibers Technology vs. Mengtian Home Group | Sinofibers Technology vs. Qtone Education Group | Sinofibers Technology vs. Time Publishing and | Sinofibers Technology vs. Dymatic Chemicals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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