Correlation Between Eastern Communications and Shanghai Jinfeng
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By analyzing existing cross correlation between Eastern Communications Co and Shanghai Jinfeng Wine, you can compare the effects of market volatilities on Eastern Communications and Shanghai Jinfeng 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 Shanghai Jinfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Shanghai Jinfeng.
Diversification Opportunities for Eastern Communications and Shanghai Jinfeng
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Shanghai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Shanghai Jinfeng Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Jinfeng Wine 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 Shanghai Jinfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Jinfeng Wine has no effect on the direction of Eastern Communications i.e., Eastern Communications and Shanghai Jinfeng go up and down completely randomly.
Pair Corralation between Eastern Communications and Shanghai Jinfeng
Assuming the 90 days trading horizon Eastern Communications is expected to generate 1.2 times less return on investment than Shanghai Jinfeng. But when comparing it to its historical volatility, Eastern Communications Co is 1.12 times less risky than Shanghai Jinfeng. It trades about 0.21 of its potential returns per unit of risk. Shanghai Jinfeng Wine is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 447.00 in Shanghai Jinfeng Wine on September 12, 2024 and sell it today you would earn a total of 214.00 from holding Shanghai Jinfeng Wine or generate 47.87% 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. Shanghai Jinfeng Wine
Performance |
| Timeline |
| Eastern Communications |
| Shanghai Jinfeng Wine |
Eastern Communications and Shanghai Jinfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Shanghai Jinfeng
The main advantage of trading using opposite Eastern Communications and Shanghai Jinfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Shanghai Jinfeng 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 Shanghai Jinfeng will offset losses from the drop in Shanghai Jinfeng's long position.| Eastern Communications vs. Industrial and Commercial | Eastern Communications vs. China Construction Bank | Eastern Communications vs. Bank of China | Eastern Communications vs. Agricultural Bank of |
| Shanghai Jinfeng vs. Eastern Communications Co | Shanghai Jinfeng vs. Hubeiyichang Transportation Group | Shanghai Jinfeng vs. Sportsoul Co Ltd | Shanghai Jinfeng vs. Guangzhou Haige Communications |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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