Correlation Between Changchun and Eastern Communications
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By analyzing existing cross correlation between Changchun UP Optotech and Eastern Communications Co, you can compare the effects of market volatilities on Changchun and Eastern Communications 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 Changchun with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Eastern Communications.
Diversification Opportunities for Changchun and Eastern Communications
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Eastern is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Changchun 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 Changchun UP Optotech are associated (or correlated) with Eastern Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Communications has no effect on the direction of Changchun i.e., Changchun and Eastern Communications go up and down completely randomly.
Pair Corralation between Changchun and Eastern Communications
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 1.51 times more return on investment than Eastern Communications. However, Changchun is 1.51 times more volatile than Eastern Communications Co. It trades about 0.2 of its potential returns per unit of risk. Eastern Communications Co is currently generating about 0.21 per unit of risk. If you would invest 2,670 in Changchun UP Optotech on September 15, 2024 and sell it today you would earn a total of 1,442 from holding Changchun UP Optotech or generate 54.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Changchun UP Optotech vs. Eastern Communications Co
Performance |
Timeline |
Changchun UP Optotech |
Eastern Communications |
Changchun and Eastern Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Changchun and Eastern Communications
The main advantage of trading using opposite Changchun and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Eastern Communications 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 Eastern Communications will offset losses from the drop in Eastern Communications' long position.Changchun vs. China Life Insurance | Changchun vs. Cinda Securities Co | Changchun vs. Piotech Inc A | Changchun vs. Dongxing Sec Co |
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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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