Correlation Between Eastern Communications and Guangdong Skychem
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By analyzing existing cross correlation between Eastern Communications Co and Guangdong Skychem Technology, you can compare the effects of market volatilities on Eastern Communications and Guangdong Skychem 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 Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Guangdong Skychem.
Diversification Opportunities for Eastern Communications and Guangdong Skychem
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastern and Guangdong is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem 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 Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Eastern Communications i.e., Eastern Communications and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Eastern Communications and Guangdong Skychem
Assuming the 90 days trading horizon Eastern Communications Co is expected to generate 0.55 times more return on investment than Guangdong Skychem. However, Eastern Communications Co is 1.82 times less risky than Guangdong Skychem. It trades about -0.09 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about -0.11 per unit of risk. If you would invest 42.00 in Eastern Communications Co on October 30, 2024 and sell it today you would lose (2.00) from holding Eastern Communications Co or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Communications Co vs. Guangdong Skychem Technology
Performance |
| Timeline |
| Eastern Communications |
| Guangdong Skychem |
Eastern Communications and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Communications and Guangdong Skychem
The main advantage of trading using opposite Eastern Communications and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem's long position.| Eastern Communications vs. Bus Online Co | Eastern Communications vs. Holitech Technology Co | Eastern Communications vs. Gome Telecom Equipment | Eastern Communications vs. Cultural Investment Holdings |
| Guangdong Skychem vs. Sihui Fuji Electronics | Guangdong Skychem vs. Zijin Mining Group | Guangdong Skychem vs. Fujian Oriental Silver | Guangdong Skychem vs. TongFu Microelectronics Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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