Correlation Between Eagon Industrial and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on Eagon Industrial and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Wireless Power.
Diversification Opportunities for Eagon Industrial and Wireless Power
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagon and Wireless is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and Wireless Power go up and down completely randomly.
Pair Corralation between Eagon Industrial and Wireless Power
Assuming the 90 days trading horizon Eagon Industrial is expected to generate 5.27 times less return on investment than Wireless Power. But when comparing it to its historical volatility, Eagon Industrial Co is 1.0 times less risky than Wireless Power. It trades about 0.08 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 302,500 in Wireless Power Amplifier on November 9, 2024 and sell it today you would earn a total of 222,500 from holding Wireless Power Amplifier or generate 73.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. Wireless Power Amplifier
Performance |
| Timeline |
| Eagon Industrial |
| Wireless Power Amplifier |
Eagon Industrial and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Wireless Power
The main advantage of trading using opposite Eagon Industrial and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| Eagon Industrial vs. Hankook Furniture Co | Eagon Industrial vs. UJU Electronics Co | Eagon Industrial vs. Aprogen Healthcare Games | Eagon Industrial vs. ABCO Electronics Co |
| Wireless Power vs. Samyoung Electronics Co | Wireless Power vs. UJU Electronics Co | Wireless Power vs. Daeduck Electronics Co | Wireless Power vs. Samlip General Foods |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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