Correlation Between Eit Environmental and China Union
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By analyzing existing cross correlation between Eit Environmental Development and China Union Holdings, you can compare the effects of market volatilities on Eit Environmental and China Union 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 China Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and China Union.
Diversification Opportunities for Eit Environmental and China Union
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eit and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and China Union Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Union Holdings 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 China Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Union Holdings has no effect on the direction of Eit Environmental i.e., Eit Environmental and China Union go up and down completely randomly.
Pair Corralation between Eit Environmental and China Union
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 1.13 times more return on investment than China Union. However, Eit Environmental is 1.13 times more volatile than China Union Holdings. It trades about 0.03 of its potential returns per unit of risk. China Union Holdings is currently generating about 0.02 per unit of risk. If you would invest 1,219 in Eit Environmental Development on September 23, 2024 and sell it today you would earn a total of 381.00 from holding Eit Environmental Development or generate 31.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Eit Environmental Development vs. China Union Holdings
Performance |
Timeline |
Eit Environmental |
China Union Holdings |
Eit Environmental and China Union Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eit Environmental and China Union
The main advantage of trading using opposite Eit Environmental and China Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, China Union 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 China Union will offset losses from the drop in China Union's long position.Eit Environmental vs. Jiangsu Yanghe Brewery | Eit Environmental vs. Eastern Communications Co | Eit Environmental vs. China Satellite Communications | Eit Environmental vs. Bank of Suzhou |
China Union vs. PetroChina Co Ltd | China Union vs. China Mobile Limited | China Union vs. CNOOC Limited | China Union vs. Ping An Insurance |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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