Correlation Between Eit Environmental and XCMG Construction
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By analyzing existing cross correlation between Eit Environmental Development and XCMG Construction Machinery, you can compare the effects of market volatilities on Eit Environmental and XCMG Construction 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 XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and XCMG Construction.
Diversification Opportunities for Eit Environmental and XCMG Construction
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eit and XCMG is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction 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 XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of Eit Environmental i.e., Eit Environmental and XCMG Construction go up and down completely randomly.
Pair Corralation between Eit Environmental and XCMG Construction
Assuming the 90 days trading horizon Eit Environmental is expected to generate 1.25 times less return on investment than XCMG Construction. In addition to that, Eit Environmental is 1.18 times more volatile than XCMG Construction Machinery. It trades about 0.03 of its total potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.05 per unit of volatility. If you would invest 489.00 in XCMG Construction Machinery on September 23, 2024 and sell it today you would earn a total of 255.00 from holding XCMG Construction Machinery or generate 52.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Eit Environmental Development vs. XCMG Construction Machinery
Performance |
Timeline |
Eit Environmental |
XCMG Construction |
Eit Environmental and XCMG Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eit Environmental and XCMG Construction
The main advantage of trading using opposite Eit Environmental and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, XCMG Construction 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 XCMG Construction will offset losses from the drop in XCMG Construction'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 |
XCMG Construction vs. Industrial and Commercial | XCMG Construction vs. Agricultural Bank of | XCMG Construction vs. China Construction Bank | XCMG Construction vs. Bank of China |
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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