Correlation Between Eit Environmental and Anhui Huaren
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By analyzing existing cross correlation between Eit Environmental Development and Anhui Huaren Health, you can compare the effects of market volatilities on Eit Environmental and Anhui Huaren 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 Eit Environmental with a short position of Anhui Huaren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Anhui Huaren.
Diversification Opportunities for Eit Environmental and Anhui Huaren
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eit and Anhui is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Anhui Huaren Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaren Health and Eit Environmental 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 Eit Environmental Development are associated (or correlated) with Anhui Huaren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaren Health has no effect on the direction of Eit Environmental i.e., Eit Environmental and Anhui Huaren go up and down completely randomly.
Pair Corralation between Eit Environmental and Anhui Huaren
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 1.12 times more return on investment than Anhui Huaren. However, Eit Environmental is 1.12 times more volatile than Anhui Huaren Health. It trades about 0.01 of its potential returns per unit of risk. Anhui Huaren Health is currently generating about -0.04 per unit of risk. If you would invest 1,486 in Eit Environmental Development on October 10, 2024 and sell it today you would lose (8.00) from holding Eit Environmental Development or give up 0.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eit Environmental Development vs. Anhui Huaren Health
Performance |
Timeline |
Eit Environmental |
Anhui Huaren Health |
Eit Environmental and Anhui Huaren Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eit Environmental and Anhui Huaren
The main advantage of trading using opposite Eit Environmental and Anhui Huaren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Anhui Huaren 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 Huaren will offset losses from the drop in Anhui Huaren's long position.Eit Environmental vs. Invengo Information Technology | Eit Environmental vs. Zhongfu Information | Eit Environmental vs. Jiangsu Yanghe Brewery | Eit Environmental vs. Sharetronic Data Technology |
Anhui Huaren vs. GreenTech Environmental Co | Anhui Huaren vs. Eit Environmental Development | Anhui Huaren vs. Anyang Iron Steel | Anhui Huaren vs. Guosheng Financial Holding |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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