Correlation Between Eagon Industrial and EV Advanced
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and EV Advanced at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eagon Industrial and EV Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and EV Advanced Material, you can compare the effects of market volatilities on Eagon Industrial and EV Advanced 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 Eagon Industrial with a short position of EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and EV Advanced.
Diversification Opportunities for Eagon Industrial and EV Advanced
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eagon and 131400 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and EV Advanced go up and down completely randomly.
Pair Corralation between Eagon Industrial and EV Advanced
Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 0.27 times more return on investment than EV Advanced. However, Eagon Industrial Co is 3.65 times less risky than EV Advanced. It trades about 0.24 of its potential returns per unit of risk. EV Advanced Material is currently generating about -0.13 per unit of risk. If you would invest 493,000 in Eagon Industrial Co on September 12, 2024 and sell it today you would earn a total of 36,000 from holding Eagon Industrial Co or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. EV Advanced Material
Performance |
| Timeline |
| Eagon Industrial |
| EV Advanced Material |
Eagon Industrial and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and EV Advanced
The main advantage of trading using opposite Eagon Industrial and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.| Eagon Industrial vs. Samsung Electronics Co | Eagon Industrial vs. Samsung Electronics Co | Eagon Industrial vs. SK Hynix | Eagon Industrial vs. POSCO Holdings |
| EV Advanced vs. Cube Entertainment | EV Advanced vs. Dreamus Company | EV Advanced vs. LG Energy Solution | EV Advanced vs. Dongwon System |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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