Correlation Between Eastern Communications and Hubei Jumpcan
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By analyzing existing cross correlation between Eastern Communications Co and Hubei Jumpcan Pharmaceutical, you can compare the effects of market volatilities on Eastern Communications and Hubei Jumpcan 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 Hubei Jumpcan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Hubei Jumpcan.
Diversification Opportunities for Eastern Communications and Hubei Jumpcan
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Hubei is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Hubei Jumpcan Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Jumpcan Pharma 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 Hubei Jumpcan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Jumpcan Pharma has no effect on the direction of Eastern Communications i.e., Eastern Communications and Hubei Jumpcan go up and down completely randomly.
Pair Corralation between Eastern Communications and Hubei Jumpcan
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 1.29 times more return on investment than Hubei Jumpcan. However, Eastern Communications is 1.29 times more volatile than Hubei Jumpcan Pharmaceutical. It trades about -0.14 of its potential returns per unit of risk. Hubei Jumpcan Pharmaceutical is currently generating about -0.24 per unit of risk. If you would invest 42.00 in Eastern Communications Co on October 25, 2024 and sell it today you would lose (3.00) from holding Eastern Communications Co or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eastern Communications Co vs. Hubei Jumpcan Pharmaceutical
Performance |
| Timeline |
| Eastern Communications |
| Hubei Jumpcan Pharma |
Eastern Communications and Hubei Jumpcan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Hubei Jumpcan
The main advantage of trading using opposite Eastern Communications and Hubei Jumpcan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Hubei Jumpcan 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 Hubei Jumpcan will offset losses from the drop in Hubei Jumpcan's long position.The idea behind Eastern Communications Co and Hubei Jumpcan Pharmaceutical 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 CEOs Directory module to screen CEOs from public companies around the world.
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