Correlation Between Eagon Industrial and N2Tech
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and N2Tech 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 N2Tech 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 N2Tech Co, you can compare the effects of market volatilities on Eagon Industrial and N2Tech 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 N2Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and N2Tech.
Diversification Opportunities for Eagon Industrial and N2Tech
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagon and N2Tech is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and N2Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N2Tech 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 N2Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N2Tech has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and N2Tech go up and down completely randomly.
Pair Corralation between Eagon Industrial and N2Tech
Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 6.27 times more return on investment than N2Tech. However, Eagon Industrial is 6.27 times more volatile than N2Tech Co. It trades about 0.04 of its potential returns per unit of risk. N2Tech Co is currently generating about -0.05 per unit of risk. If you would invest 525,000 in Eagon Industrial Co on November 5, 2024 and sell it today you would earn a total of 6,000 from holding Eagon Industrial Co or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. N2Tech Co
Performance |
| Timeline |
| Eagon Industrial |
| N2Tech |
Eagon Industrial and N2Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and N2Tech
The main advantage of trading using opposite Eagon Industrial and N2Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, N2Tech 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 N2Tech will offset losses from the drop in N2Tech's long position.| Eagon Industrial vs. Sewoon Medical Co | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Kukil Metal Co | Eagon Industrial vs. Hanwha Life Insurance |
| N2Tech vs. CG Hi Tech | N2Tech vs. Daishin Information Communications | N2Tech vs. Hanjoo Light Metal | N2Tech vs. BIT Computer Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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