Correlation Between Hwabao WP and Eastern Communications
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By analyzing existing cross correlation between Hwabao WP CSI and Eastern Communications Co, you can compare the effects of market volatilities on Hwabao WP 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 Hwabao WP with a short position of Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwabao WP and Eastern Communications.
Diversification Opportunities for Hwabao WP and Eastern Communications
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwabao and Eastern is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hwabao WP CSI and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications and Hwabao WP 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 Hwabao WP CSI 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 Hwabao WP i.e., Hwabao WP and Eastern Communications go up and down completely randomly.
Pair Corralation between Hwabao WP and Eastern Communications
Assuming the 90 days trading horizon Hwabao WP CSI is expected to generate 0.75 times more return on investment than Eastern Communications. However, Hwabao WP CSI is 1.33 times less risky than Eastern Communications. It trades about -0.18 of its potential returns per unit of risk. Eastern Communications Co is currently generating about -0.34 per unit of risk. If you would invest 132.00 in Hwabao WP CSI on October 7, 2024 and sell it today you would lose (8.00) from holding Hwabao WP CSI or give up 6.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hwabao WP CSI vs. Eastern Communications Co
Performance |
Timeline |
Hwabao WP CSI |
Eastern Communications |
Hwabao WP and Eastern Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hwabao WP and Eastern Communications
The main advantage of trading using opposite Hwabao WP and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwabao WP 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.Hwabao WP vs. Hwabao WP CSI | Hwabao WP vs. Hwabao WP CS | Hwabao WP vs. Hwabao WP SSE | Hwabao WP vs. Hwabao WP SP |
Eastern Communications vs. PetroChina Co Ltd | Eastern Communications vs. Gansu Jiu Steel | Eastern Communications vs. Aba Chemicals Corp | Eastern Communications vs. Yes Optoelectronics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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