Correlation Between Success Electronics and Epoxy Base
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By analyzing existing cross correlation between Success Electronics and Epoxy Base Electronic, you can compare the effects of market volatilities on Success Electronics and Epoxy Base 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 Success Electronics with a short position of Epoxy Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of Success Electronics and Epoxy Base.
Diversification Opportunities for Success Electronics and Epoxy Base
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Success and Epoxy is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Success Electronics and Epoxy Base Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epoxy Base Electronic and Success Electronics 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 Success Electronics are associated (or correlated) with Epoxy Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epoxy Base Electronic has no effect on the direction of Success Electronics i.e., Success Electronics and Epoxy Base go up and down completely randomly.
Pair Corralation between Success Electronics and Epoxy Base
Assuming the 90 days trading horizon Success Electronics is expected to under-perform the Epoxy Base. But the stock apears to be less risky and, when comparing its historical volatility, Success Electronics is 1.22 times less risky than Epoxy Base. The stock trades about -0.05 of its potential returns per unit of risk. The Epoxy Base Electronic is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 628.00 in Epoxy Base Electronic on August 25, 2024 and sell it today you would lose (105.00) from holding Epoxy Base Electronic or give up 16.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Success Electronics vs. Epoxy Base Electronic
Performance |
| Timeline |
| Success Electronics |
| Epoxy Base Electronic |
Success Electronics and Epoxy Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Success Electronics and Epoxy Base
The main advantage of trading using opposite Success Electronics and Epoxy Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Success Electronics position performs unexpectedly, Epoxy Base 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 Epoxy Base will offset losses from the drop in Epoxy Base's long position.The idea behind Success Electronics and Epoxy Base Electronic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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