Correlation Between Eastern Communications and Shenzhen
Specify exactly 2 symbols:
By analyzing existing cross correlation between Eastern Communications Co and Shenzhen AV Display Co, you can compare the effects of market volatilities on Eastern Communications and Shenzhen 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 Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Shenzhen.
Diversification Opportunities for Eastern Communications and Shenzhen
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and Shenzhen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display 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 Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Eastern Communications i.e., Eastern Communications and Shenzhen go up and down completely randomly.
Pair Corralation between Eastern Communications and Shenzhen
Assuming the 90 days trading horizon Eastern Communications is expected to generate 3.02 times less return on investment than Shenzhen. But when comparing it to its historical volatility, Eastern Communications Co is 1.66 times less risky than Shenzhen. It trades about 0.02 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,678 in Shenzhen AV Display Co on September 14, 2024 and sell it today you would earn a total of 759.00 from holding Shenzhen AV Display Co or generate 28.34% 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. Shenzhen AV Display Co
Performance |
| Timeline |
| Eastern Communications |
| Shenzhen AV Display |
Eastern Communications and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Shenzhen
The main advantage of trading using opposite Eastern Communications and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Shenzhen 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 Shenzhen will offset losses from the drop in Shenzhen's long position.The idea behind Eastern Communications Co and Shenzhen AV Display Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Shenzhen vs. Changjiang Publishing Media | Shenzhen vs. Shanghai Action Education | Shenzhen vs. Eastern Communications Co | Shenzhen vs. Xinjiang Communications Construction |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |