Correlation Between Eastern Communications and Fushun Special
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By analyzing existing cross correlation between Eastern Communications Co and Fushun Special Steel, you can compare the effects of market volatilities on Eastern Communications and Fushun Special 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 Fushun Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Fushun Special.
Diversification Opportunities for Eastern Communications and Fushun Special
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and Fushun is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Fushun Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fushun Special Steel 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 Fushun Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fushun Special Steel has no effect on the direction of Eastern Communications i.e., Eastern Communications and Fushun Special go up and down completely randomly.
Pair Corralation between Eastern Communications and Fushun Special
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.84 times more return on investment than Fushun Special. However, Eastern Communications Co is 1.19 times less risky than Fushun Special. It trades about 0.11 of its potential returns per unit of risk. Fushun Special Steel is currently generating about 0.04 per unit of risk. If you would invest 31.00 in Eastern Communications Co on August 30, 2024 and sell it today you would earn a total of 11.00 from holding Eastern Communications Co or generate 35.48% 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. Fushun Special Steel
Performance |
| Timeline |
| Eastern Communications |
| Fushun Special Steel |
Eastern Communications and Fushun Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Fushun Special
The main advantage of trading using opposite Eastern Communications and Fushun Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Fushun Special 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 Fushun Special will offset losses from the drop in Fushun Special's long position.| Eastern Communications vs. Zhejiang Yayi Metal | Eastern Communications vs. Hubei Dinglong Chemical | Eastern Communications vs. Guangzhou Jointas Chemical | Eastern Communications vs. Longxing Chemical Stock |
| Fushun Special vs. Wanhua Chemical Group | Fushun Special vs. Baoshan Iron Steel | Fushun Special vs. Rongsheng Petrochemical Co | Fushun Special 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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