Correlation Between Eastern Communications and CIMC Vehicles
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By analyzing existing cross correlation between Eastern Communications Co and CIMC Vehicles Co, you can compare the effects of market volatilities on Eastern Communications and CIMC Vehicles 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 CIMC Vehicles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and CIMC Vehicles.
Diversification Opportunities for Eastern Communications and CIMC Vehicles
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and CIMC is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and CIMC Vehicles Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMC Vehicles 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 CIMC Vehicles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMC Vehicles has no effect on the direction of Eastern Communications i.e., Eastern Communications and CIMC Vehicles go up and down completely randomly.
Pair Corralation between Eastern Communications and CIMC Vehicles
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 1.28 times more return on investment than CIMC Vehicles. However, Eastern Communications is 1.28 times more volatile than CIMC Vehicles Co. It trades about 0.05 of its potential returns per unit of risk. CIMC Vehicles Co is currently generating about 0.0 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. CIMC Vehicles Co
Performance |
| Timeline |
| Eastern Communications |
| CIMC Vehicles |
Eastern Communications and CIMC Vehicles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and CIMC Vehicles
The main advantage of trading using opposite Eastern Communications and CIMC Vehicles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, CIMC Vehicles 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 CIMC Vehicles will offset losses from the drop in CIMC Vehicles' 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 |
| CIMC Vehicles vs. China World Trade | CIMC Vehicles vs. Guangdong Jingyi Metal | CIMC Vehicles vs. Rising Nonferrous Metals | CIMC Vehicles vs. Shandong Hongchuang Aluminum |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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