Correlation Between EBEST Investment and National Plastic
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and National Plastic 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 EBEST Investment and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and National Plastic Co, you can compare the effects of market volatilities on EBEST Investment and National Plastic 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 EBEST Investment with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and National Plastic.
Diversification Opportunities for EBEST Investment and National Plastic
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EBEST and National is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of EBEST Investment i.e., EBEST Investment and National Plastic go up and down completely randomly.
Pair Corralation between EBEST Investment and National Plastic
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 1.37 times more return on investment than National Plastic. However, EBEST Investment is 1.37 times more volatile than National Plastic Co. It trades about -0.02 of its potential returns per unit of risk. National Plastic Co is currently generating about -0.05 per unit of risk. If you would invest 513,193 in EBEST Investment Securities on September 1, 2024 and sell it today you would lose (117,693) from holding EBEST Investment Securities or give up 22.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. National Plastic Co
Performance |
| Timeline |
| EBEST Investment Sec |
| National Plastic |
EBEST Investment and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and National Plastic
The main advantage of trading using opposite EBEST Investment and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| EBEST Investment vs. DB Financial Investment | EBEST Investment vs. Lindeman Asia Investment | EBEST Investment vs. BGF Retail Co | EBEST Investment vs. Jin Air Co |
| National Plastic vs. Hyundai Engineering Plastics | National Plastic vs. INNOX Advanced Materials | National Plastic vs. Eagon Industrial Co | National Plastic vs. Samhwa Paint Industrial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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