Correlation Between Eit Environmental and China Construction
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By analyzing existing cross correlation between Eit Environmental Development and China Construction Bank, you can compare the effects of market volatilities on Eit Environmental and China 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 China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eit Environmental and China Construction.
Diversification Opportunities for Eit Environmental and China Construction
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eit and China is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eit Environmental Development and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank 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 Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Eit Environmental i.e., Eit Environmental and China Construction go up and down completely randomly.
Pair Corralation between Eit Environmental and China Construction
Assuming the 90 days trading horizon Eit Environmental Development is expected to generate 2.87 times more return on investment than China Construction. However, Eit Environmental is 2.87 times more volatile than China Construction Bank. It trades about 0.13 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.13 per unit of risk. If you would invest 1,165 in Eit Environmental Development on September 25, 2024 and sell it today you would earn a total of 396.00 from holding Eit Environmental Development or generate 33.99% 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 Construction Bank
Performance |
Timeline |
Eit Environmental |
China Construction Bank |
Eit Environmental and China Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eit Environmental and China Construction
The main advantage of trading using opposite Eit Environmental and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eit Environmental position performs unexpectedly, China 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 China Construction will offset losses from the drop in China Construction's long position.Eit Environmental vs. Ming Yang Smart | Eit Environmental vs. 159681 | Eit Environmental vs. 159005 | Eit Environmental vs. Loctek Ergonomic Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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