Correlation Between Eastern Communications and Keda Clean
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By analyzing existing cross correlation between Eastern Communications Co and Keda Clean Energy, you can compare the effects of market volatilities on Eastern Communications and Keda Clean 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 Keda Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Keda Clean.
Diversification Opportunities for Eastern Communications and Keda Clean
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Keda is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Keda Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keda Clean Energy 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 Keda Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keda Clean Energy has no effect on the direction of Eastern Communications i.e., Eastern Communications and Keda Clean go up and down completely randomly.
Pair Corralation between Eastern Communications and Keda Clean
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 1.22 times more return on investment than Keda Clean. However, Eastern Communications is 1.22 times more volatile than Keda Clean Energy. It trades about 0.05 of its potential returns per unit of risk. Keda Clean Energy is currently generating about 0.02 per unit of risk. If you would invest 42.00 in Eastern Communications Co on August 29, 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. Keda Clean Energy
Performance |
| Timeline |
| Eastern Communications |
| Keda Clean Energy |
Eastern Communications and Keda Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Keda Clean
The main advantage of trading using opposite Eastern Communications and Keda Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Keda Clean 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 Keda Clean will offset losses from the drop in Keda Clean's long position.The idea behind Eastern Communications Co and Keda Clean Energy 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.
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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