Correlation Between Eastern Communications and Industrial Bank
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By analyzing existing cross correlation between Eastern Communications Co and Industrial Bank Co, you can compare the effects of market volatilities on Eastern Communications and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Industrial Bank.
Diversification Opportunities for Eastern Communications and Industrial Bank
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Industrial is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Industrial Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Eastern Communications i.e., Eastern Communications and Industrial Bank go up and down completely randomly.
Pair Corralation between Eastern Communications and Industrial Bank
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 1.38 times more return on investment than Industrial Bank. However, Eastern Communications is 1.38 times more volatile than Industrial Bank Co. It trades about 0.21 of its potential returns per unit of risk. Industrial Bank Co is currently generating about 0.13 per unit of risk. If you would invest 31.00 in Eastern Communications Co on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Eastern Communications Co or generate 38.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. Industrial Bank Co
Performance |
| Timeline |
| Eastern Communications |
| Industrial Bank |
Eastern Communications and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Industrial Bank
The main advantage of trading using opposite Eastern Communications and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank'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 |
| Industrial Bank vs. Industrial and Commercial | Industrial Bank vs. China Construction Bank | Industrial Bank vs. Bank of China | Industrial Bank vs. Agricultural Bank of |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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