Correlation Between Eastern Communications and Hainan Mining
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By analyzing existing cross correlation between Eastern Communications Co and Hainan Mining Co, you can compare the effects of market volatilities on Eastern Communications and Hainan Mining 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 Hainan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Hainan Mining.
Diversification Opportunities for Eastern Communications and Hainan Mining
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eastern and Hainan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Hainan Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Mining 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 Hainan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Mining has no effect on the direction of Eastern Communications i.e., Eastern Communications and Hainan Mining go up and down completely randomly.
Pair Corralation between Eastern Communications and Hainan Mining
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.96 times more return on investment than Hainan Mining. However, Eastern Communications Co is 1.04 times less risky than Hainan Mining. It trades about 0.02 of its potential returns per unit of risk. Hainan Mining Co is currently generating about 0.01 per unit of risk. If you would invest 40.00 in Eastern Communications Co on September 28, 2024 and sell it today you would earn a total of 2.00 from holding Eastern Communications Co or generate 5.0% 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. Hainan Mining Co
Performance |
| Timeline |
| Eastern Communications |
| Hainan Mining |
Eastern Communications and Hainan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Hainan Mining
The main advantage of trading using opposite Eastern Communications and Hainan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Hainan Mining 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 Hainan Mining will offset losses from the drop in Hainan Mining's long position.| Eastern Communications vs. Industrial and Commercial | Eastern Communications vs. Agricultural Bank of | Eastern Communications vs. China Construction Bank | Eastern Communications vs. Bank of China |
| Hainan Mining vs. Tianshui Huatian Technology | Hainan Mining vs. Sinocelltech Group | Hainan Mining vs. Hangzhou Pinming Software | Hainan Mining vs. Western Superconducting Tech |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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