Correlation Between Eastern Communications and China Satellite
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By analyzing existing cross correlation between Eastern Communications Co and China Satellite Communications, you can compare the effects of market volatilities on Eastern Communications and China Satellite 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 China Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and China Satellite.
Diversification Opportunities for Eastern Communications and China Satellite
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and China is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and China Satellite Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Satellite Comm 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 China Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Satellite Comm has no effect on the direction of Eastern Communications i.e., Eastern Communications and China Satellite go up and down completely randomly.
Pair Corralation between Eastern Communications and China Satellite
Assuming the 90 days trading horizon Eastern Communications is expected to generate 1.44 times less return on investment than China Satellite. But when comparing it to its historical volatility, Eastern Communications Co is 1.3 times less risky than China Satellite. It trades about 0.08 of its potential returns per unit of risk. China Satellite Communications is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,523 in China Satellite Communications on August 28, 2024 and sell it today you would earn a total of 536.00 from holding China Satellite Communications or generate 35.19% 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. China Satellite Communications
Performance |
| Timeline |
| Eastern Communications |
| China Satellite Comm |
Eastern Communications and China Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and China Satellite
The main advantage of trading using opposite Eastern Communications and China Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, China Satellite 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 China Satellite will offset losses from the drop in China Satellite's long position.| Eastern Communications vs. Guangdong Jinma Entertainment | Eastern Communications vs. Huaibei Mining Holdings | Eastern Communications vs. Zijin Mining Group | Eastern Communications vs. Xinjiang Baodi Mining |
| China Satellite vs. Chengdu Kanghua Biological | China Satellite vs. Beijing Wantai Biological | China Satellite vs. Suzhou Novoprotein Scientific | China Satellite vs. Aluminum Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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