Correlation Between Eastern Communications and Xiamen CD
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By analyzing existing cross correlation between Eastern Communications Co and Xiamen CD, you can compare the effects of market volatilities on Eastern Communications and Xiamen CD 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 Eastern Communications with a short position of Xiamen CD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Xiamen CD.
Diversification Opportunities for Eastern Communications and Xiamen CD
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastern and Xiamen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Xiamen CD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen CD and Eastern Communications 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 Eastern Communications Co are associated (or correlated) with Xiamen CD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen CD has no effect on the direction of Eastern Communications i.e., Eastern Communications and Xiamen CD go up and down completely randomly.
Pair Corralation between Eastern Communications and Xiamen CD
Assuming the 90 days trading horizon Eastern Communications is expected to generate 1.02 times less return on investment than Xiamen CD. In addition to that, Eastern Communications is 1.01 times more volatile than Xiamen CD. It trades about 0.07 of its total potential returns per unit of risk. Xiamen CD is currently generating about 0.07 per unit of volatility. If you would invest 830.00 in Xiamen CD on October 8, 2024 and sell it today you would earn a total of 165.00 from holding Xiamen CD or generate 19.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eastern Communications Co vs. Xiamen CD
Performance |
Timeline |
Eastern Communications |
Xiamen CD |
Eastern Communications and Xiamen CD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eastern Communications and Xiamen CD
The main advantage of trading using opposite Eastern Communications and Xiamen CD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Xiamen CD 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 Xiamen CD will offset losses from the drop in Xiamen CD's long position.Eastern Communications vs. Kweichow Moutai Co | Eastern Communications vs. NAURA Technology Group | Eastern Communications vs. Zhejiang Orient Gene | Eastern Communications vs. APT Medical |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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