Correlation Between Stic Investments and EyeGene
Can any of the company-specific risk be diversified away by investing in both Stic Investments and EyeGene 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 Stic Investments and EyeGene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and EyeGene, you can compare the effects of market volatilities on Stic Investments and EyeGene 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 Stic Investments with a short position of EyeGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and EyeGene.
Diversification Opportunities for Stic Investments and EyeGene
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stic and EyeGene is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and EyeGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EyeGene and Stic Investments 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 Stic Investments are associated (or correlated) with EyeGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EyeGene has no effect on the direction of Stic Investments i.e., Stic Investments and EyeGene go up and down completely randomly.
Pair Corralation between Stic Investments and EyeGene
Assuming the 90 days trading horizon Stic Investments is expected to generate 0.93 times more return on investment than EyeGene. However, Stic Investments is 1.07 times less risky than EyeGene. It trades about -0.03 of its potential returns per unit of risk. EyeGene is currently generating about -0.12 per unit of risk. If you would invest 881,000 in Stic Investments on September 2, 2024 and sell it today you would lose (53,000) from holding Stic Investments or give up 6.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. EyeGene
Performance |
| Timeline |
| Stic Investments |
| EyeGene |
Stic Investments and EyeGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and EyeGene
The main advantage of trading using opposite Stic Investments and EyeGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, EyeGene 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 EyeGene will offset losses from the drop in EyeGene's long position.| Stic Investments vs. Dongsin Engineering Construction | Stic Investments vs. Doosan Fuel Cell | Stic Investments vs. Daishin Balance 1 | Stic Investments vs. Total Soft Bank |
| EyeGene vs. CJ Seafood Corp | EyeGene vs. Chorokbaem Healthcare Co | EyeGene vs. Shinsegae Food | EyeGene vs. InnoTherapy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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