Correlation Between EASY HOLDINGS and Nepes
Can any of the company-specific risk be diversified away by investing in both EASY HOLDINGS and Nepes 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 EASY HOLDINGS and Nepes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EASY HOLDINGS Co and Nepes, you can compare the effects of market volatilities on EASY HOLDINGS and Nepes 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 EASY HOLDINGS with a short position of Nepes. Check out your portfolio center. Please also check ongoing floating volatility patterns of EASY HOLDINGS and Nepes.
Diversification Opportunities for EASY HOLDINGS and Nepes
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between EASY and Nepes is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding EASY HOLDINGS Co and Nepes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nepes and EASY HOLDINGS 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 EASY HOLDINGS Co are associated (or correlated) with Nepes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nepes has no effect on the direction of EASY HOLDINGS i.e., EASY HOLDINGS and Nepes go up and down completely randomly.
Pair Corralation between EASY HOLDINGS and Nepes
Assuming the 90 days trading horizon EASY HOLDINGS Co is expected to generate 0.45 times more return on investment than Nepes. However, EASY HOLDINGS Co is 2.23 times less risky than Nepes. It trades about 0.03 of its potential returns per unit of risk. Nepes is currently generating about -0.09 per unit of risk. If you would invest 261,500 in EASY HOLDINGS Co on August 25, 2024 and sell it today you would earn a total of 26,000 from holding EASY HOLDINGS Co or generate 9.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
EASY HOLDINGS Co vs. Nepes
Performance |
| Timeline |
| EASY HOLDINGS |
| Nepes |
EASY HOLDINGS and Nepes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EASY HOLDINGS and Nepes
The main advantage of trading using opposite EASY HOLDINGS and Nepes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EASY HOLDINGS position performs unexpectedly, Nepes 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 Nepes will offset losses from the drop in Nepes' long position.The idea behind EASY HOLDINGS Co and Nepes pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nepes vs. Dongjin Semichem Co | Nepes vs. SFA Semicon Co | Nepes vs. Seoul Semiconductor Co | Nepes vs. EO Technics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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