Correlation Between Eestech and China Natural
Can any of the company-specific risk be diversified away by investing in both Eestech and China Natural 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 Eestech and China Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eestech and China Natural Resources, you can compare the effects of market volatilities on Eestech and China Natural 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 Eestech with a short position of China Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eestech and China Natural.
Diversification Opportunities for Eestech and China Natural
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eestech and China is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eestech and China Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Natural Resources and Eestech 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 Eestech are associated (or correlated) with China Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Natural Resources has no effect on the direction of Eestech i.e., Eestech and China Natural go up and down completely randomly.
Pair Corralation between Eestech and China Natural
If you would invest 0.04 in Eestech on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Eestech or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eestech vs. China Natural Resources
Performance |
| Timeline |
| Eestech |
| China Natural Resources |
Eestech and China Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eestech and China Natural
The main advantage of trading using opposite Eestech and China Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eestech position performs unexpectedly, China Natural 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 China Natural will offset losses from the drop in China Natural's long position.| Eestech vs. Small Cap Core | Eestech vs. Freedom Holding Corp | Eestech vs. Gfl Environmental Holdings | Eestech vs. Growth Fund Of |
| China Natural vs. Seychelle Environmtl | China Natural vs. Vow ASA | China Natural vs. Eestech | China Natural vs. Energy and Water |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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