Correlation Between Eastern Communications and Anhui Transport
Specify exactly 2 symbols:
By analyzing existing cross correlation between Eastern Communications Co and Anhui Transport Consulting, you can compare the effects of market volatilities on Eastern Communications and Anhui Transport 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 Anhui Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Anhui Transport.
Diversification Opportunities for Eastern Communications and Anhui Transport
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eastern and Anhui is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Anhui Transport Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Transport Cons 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 Anhui Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Transport Cons has no effect on the direction of Eastern Communications i.e., Eastern Communications and Anhui Transport go up and down completely randomly.
Pair Corralation between Eastern Communications and Anhui Transport
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 1.11 times more return on investment than Anhui Transport. However, Eastern Communications is 1.11 times more volatile than Anhui Transport Consulting. It trades about 0.09 of its potential returns per unit of risk. Anhui Transport Consulting is currently generating about 0.04 per unit of risk. If you would invest 42.00 in Eastern Communications Co on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Eastern Communications Co or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. Anhui Transport Consulting
Performance |
| Timeline |
| Eastern Communications |
| Anhui Transport Cons |
Eastern Communications and Anhui Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Anhui Transport
The main advantage of trading using opposite Eastern Communications and Anhui Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Anhui Transport 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 Anhui Transport will offset losses from the drop in Anhui Transport's long position.The idea behind Eastern Communications Co and Anhui Transport Consulting 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.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |