Correlation Between Tokai Carbon and ENF Technology
Can any of the company-specific risk be diversified away by investing in both Tokai Carbon and ENF Technology 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 Tokai Carbon and ENF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokai Carbon Korea and ENF Technology Co, you can compare the effects of market volatilities on Tokai Carbon and ENF Technology 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 Tokai Carbon with a short position of ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokai Carbon and ENF Technology.
Diversification Opportunities for Tokai Carbon and ENF Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tokai and ENF is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tokai Carbon Korea and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology and Tokai Carbon 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 Tokai Carbon Korea are associated (or correlated) with ENF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENF Technology has no effect on the direction of Tokai Carbon i.e., Tokai Carbon and ENF Technology go up and down completely randomly.
Pair Corralation between Tokai Carbon and ENF Technology
Assuming the 90 days trading horizon Tokai Carbon Korea is expected to under-perform the ENF Technology. But the stock apears to be less risky and, when comparing its historical volatility, Tokai Carbon Korea is 1.93 times less risky than ENF Technology. The stock trades about -0.02 of its potential returns per unit of risk. The ENF Technology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,655,000 in ENF Technology Co on September 21, 2024 and sell it today you would earn a total of 81,000 from holding ENF Technology Co or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokai Carbon Korea vs. ENF Technology Co
Performance |
| Timeline |
| Tokai Carbon Korea |
| ENF Technology |
Tokai Carbon and ENF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokai Carbon and ENF Technology
The main advantage of trading using opposite Tokai Carbon and ENF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokai Carbon position performs unexpectedly, ENF Technology 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 ENF Technology will offset losses from the drop in ENF Technology's long position.| Tokai Carbon vs. SK Hynix | Tokai Carbon vs. People Technology | Tokai Carbon vs. Hana Materials | Tokai Carbon vs. SIMMTECH Co |
| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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