Correlation Between Eastern Communications and Guangxi Wuzhou
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By analyzing existing cross correlation between Eastern Communications Co and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Eastern Communications and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Communications and Guangxi Wuzhou.
Diversification Opportunities for Eastern Communications and Guangxi Wuzhou
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Guangxi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Communications Co and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Eastern Communications i.e., Eastern Communications and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Eastern Communications and Guangxi Wuzhou
Assuming the 90 days trading horizon Eastern Communications is expected to generate 1.98 times less return on investment than Guangxi Wuzhou. In addition to that, Eastern Communications is 1.07 times more volatile than Guangxi Wuzhou Communications. It trades about 0.15 of its total potential returns per unit of risk. Guangxi Wuzhou Communications is currently generating about 0.31 per unit of volatility. If you would invest 326.00 in Guangxi Wuzhou Communications on September 20, 2024 and sell it today you would earn a total of 181.00 from holding Guangxi Wuzhou Communications or generate 55.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eastern Communications Co vs. Guangxi Wuzhou Communications
Performance |
Timeline |
Eastern Communications |
Guangxi Wuzhou Commu |
Eastern Communications and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eastern Communications and Guangxi Wuzhou
The main advantage of trading using opposite Eastern Communications and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Communications position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.Eastern Communications vs. Industrial and Commercial | Eastern Communications vs. China Construction Bank | Eastern Communications vs. Bank of China | Eastern Communications vs. Agricultural Bank of |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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