Correlation Between Eit Environmental and Ningbo David
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By analyzing existing cross correlation between Eit Environmental Development and Ningbo David Medical, you can compare the effects of market volatilities on Eit Environmental and Ningbo David 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 Ningbo David. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and Ningbo David.
Diversification Opportunities for Eit Environmental and Ningbo David
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eit and Ningbo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and Ningbo David Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo David Medical 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 Ningbo David. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo David Medical has no effect on the direction of Eit Environmental i.e., Eit Environmental and Ningbo David go up and down completely randomly.
Pair Corralation between Eit Environmental and Ningbo David
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 1.05 times more return on investment than Ningbo David. However, Eit Environmental is 1.05 times more volatile than Ningbo David Medical. It trades about 0.16 of its potential returns per unit of risk. Ningbo David Medical is currently generating about 0.1 per unit of risk. If you would invest 1,109 in Eit Environmental Development on September 23, 2024 and sell it today you would earn a total of 491.00 from holding Eit Environmental Development or generate 44.27% 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. Ningbo David Medical
Performance |
Timeline |
Eit Environmental |
Ningbo David Medical |
Eit Environmental and Ningbo David Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eit Environmental and Ningbo David
The main advantage of trading using opposite Eit Environmental and Ningbo David positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, Ningbo David 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 Ningbo David will offset losses from the drop in Ningbo David's long position.Eit Environmental vs. Youyou Foods Co | Eit Environmental vs. Guangdong Liantai Environmental | Eit Environmental vs. Great Sun Foods Co | Eit Environmental vs. Guilin Seamild Foods |
Ningbo David vs. New China Life | Ningbo David vs. Ming Yang Smart | Ningbo David vs. 159681 | Ningbo David vs. 159005 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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