Correlation Between Eason Technology and X Financial
Can any of the company-specific risk be diversified away by investing in both Eason Technology and X Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eason Technology and X Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eason Technology Limited and X Financial Class, you can compare the effects of market volatilities on Eason Technology and X Financial 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 Eason Technology with a short position of X Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eason Technology and X Financial.
Diversification Opportunities for Eason Technology and X Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eason and XYF is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eason Technology Limited and X Financial Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Financial Class and Eason Technology 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 Eason Technology Limited are associated (or correlated) with X Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Financial Class has no effect on the direction of Eason Technology i.e., Eason Technology and X Financial go up and down completely randomly.
Pair Corralation between Eason Technology and X Financial
Considering the 90-day investment horizon Eason Technology Limited is expected to generate 10.76 times more return on investment than X Financial. However, Eason Technology is 10.76 times more volatile than X Financial Class. It trades about 0.05 of its potential returns per unit of risk. X Financial Class is currently generating about 0.33 per unit of risk. If you would invest 2,900 in Eason Technology Limited on November 23, 2024 and sell it today you would lose (1,898) from holding Eason Technology Limited or give up 65.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 90.91% |
Values | Daily Returns |
Eason Technology Limited vs. X Financial Class
Performance |
Timeline |
Eason Technology |
X Financial Class |
Eason Technology and X Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eason Technology and X Financial
The main advantage of trading using opposite Eason Technology and X Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eason Technology position performs unexpectedly, X Financial 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 X Financial will offset losses from the drop in X Financial's long position.Eason Technology vs. ReTo Eco Solutions | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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