Correlation Between Eastern Communications and Fujian Oriental
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By analyzing existing cross correlation between Eastern Communications Co and Fujian Oriental Silver, you can compare the effects of market volatilities on Eastern Communications and Fujian Oriental 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 Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Fujian Oriental.
Diversification Opportunities for Eastern Communications and Fujian Oriental
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Fujian is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver 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 Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Eastern Communications i.e., Eastern Communications and Fujian Oriental go up and down completely randomly.
Pair Corralation between Eastern Communications and Fujian Oriental
Assuming the 90 days trading horizon Eastern Communications Co is expected to under-perform the Fujian Oriental. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Communications Co is 1.63 times less risky than Fujian Oriental. The stock trades about -0.13 of its potential returns per unit of risk. The Fujian Oriental Silver is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 685.00 in Fujian Oriental Silver on October 20, 2024 and sell it today you would lose (16.00) from holding Fujian Oriental Silver or give up 2.34% 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. Fujian Oriental Silver
Performance |
| Timeline |
| Eastern Communications |
| Fujian Oriental Silver |
Eastern Communications and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Fujian Oriental
The main advantage of trading using opposite Eastern Communications and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.| Eastern Communications vs. Shanghai Phichem Material | Eastern Communications vs. GRIPM Advanced Materials | Eastern Communications vs. Ningbo Tip Rubber | Eastern Communications vs. Fujian Boss Software |
| Fujian Oriental vs. Ningbo Fujia Industrial | Fujian Oriental vs. Bosera CMSK Industrial | Fujian Oriental vs. Hengli Industrial Development | Fujian Oriental vs. Guangdong Jingyi Metal |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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