Correlation Between ES Ceramics and Eonmetall Group
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Eonmetall Group 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 ES Ceramics and Eonmetall Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Eonmetall Group Bhd, you can compare the effects of market volatilities on ES Ceramics and Eonmetall Group 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 ES Ceramics with a short position of Eonmetall Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Eonmetall Group.
Diversification Opportunities for ES Ceramics and Eonmetall Group
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0100 and Eonmetall is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Eonmetall Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eonmetall Group Bhd and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Eonmetall Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eonmetall Group Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and Eonmetall Group go up and down completely randomly.
Pair Corralation between ES Ceramics and Eonmetall Group
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Eonmetall Group. But the stock apears to be less risky and, when comparing its historical volatility, ES Ceramics Technology is 1.02 times less risky than Eonmetall Group. The stock trades about -0.14 of its potential returns per unit of risk. The Eonmetall Group Bhd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Eonmetall Group Bhd on October 30, 2024 and sell it today you would earn a total of 0.00 from holding Eonmetall Group Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Eonmetall Group Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| Eonmetall Group Bhd |
ES Ceramics and Eonmetall Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Eonmetall Group
The main advantage of trading using opposite ES Ceramics and Eonmetall Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Eonmetall Group 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 Eonmetall Group will offset losses from the drop in Eonmetall Group's long position.| ES Ceramics vs. Binasat Communications Bhd | ES Ceramics vs. Kluang Rubber | ES Ceramics vs. Sunway Construction Group | ES Ceramics vs. Press Metal Bhd |
| Eonmetall Group vs. ONETECH SOLUTIONS HOLDINGS | Eonmetall Group vs. Sunzen Biotech Bhd | Eonmetall Group vs. Dufu Tech Corp | Eonmetall Group vs. YX Precious Metals |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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