Correlation Between Eastern Communications and JiShi Media
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By analyzing existing cross correlation between Eastern Communications Co and JiShi Media Co, you can compare the effects of market volatilities on Eastern Communications and JiShi Media 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 JiShi Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and JiShi Media.
Diversification Opportunities for Eastern Communications and JiShi Media
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and JiShi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and JiShi Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JiShi Media 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 JiShi Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JiShi Media has no effect on the direction of Eastern Communications i.e., Eastern Communications and JiShi Media go up and down completely randomly.
Pair Corralation between Eastern Communications and JiShi Media
Assuming the 90 days trading horizon Eastern Communications Co is expected to under-perform the JiShi Media. But the stock apears to be less risky and, when comparing its historical volatility, Eastern Communications Co is 1.97 times less risky than JiShi Media. The stock trades about -0.01 of its potential returns per unit of risk. The JiShi Media Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 142.00 in JiShi Media Co on October 14, 2024 and sell it today you would earn a total of 26.00 from holding JiShi Media Co or generate 18.31% 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. JiShi Media Co
Performance |
| Timeline |
| Eastern Communications |
| JiShi Media |
Eastern Communications and JiShi Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and JiShi Media
The main advantage of trading using opposite Eastern Communications and JiShi Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, JiShi Media 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 JiShi Media will offset losses from the drop in JiShi Media's long position.The idea behind Eastern Communications Co and JiShi Media Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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