Correlation Between EBEST Investment and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Phoenix Materials 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 Phoenix Materials 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 Phoenix Materials Co, you can compare the effects of market volatilities on EBEST Investment and Phoenix Materials 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 Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Phoenix Materials.
Diversification Opportunities for EBEST Investment and Phoenix Materials
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EBEST and Phoenix is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of EBEST Investment i.e., EBEST Investment and Phoenix Materials go up and down completely randomly.
Pair Corralation between EBEST Investment and Phoenix Materials
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.42 times more return on investment than Phoenix Materials. However, EBEST Investment Securities is 2.41 times less risky than Phoenix Materials. It trades about -0.01 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.02 per unit of risk. If you would invest 491,851 in EBEST Investment Securities on August 31, 2024 and sell it today you would lose (81,851) from holding EBEST Investment Securities or give up 16.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.11% |
| Values | Daily Returns |
EBEST Investment Securities vs. Phoenix Materials Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Phoenix Materials |
EBEST Investment and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Phoenix Materials
The main advantage of trading using opposite EBEST Investment and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.| EBEST Investment vs. Korean Reinsurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Seoul Food Industrial | EBEST Investment vs. Organic Special Pet |
| Phoenix Materials vs. Dongsin Engineering Construction | Phoenix Materials vs. Doosan Fuel Cell | Phoenix Materials vs. Daishin Balance 1 | Phoenix Materials vs. Total Soft Bank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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