Correlation Between EBEST Investment and Next Bt
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Next Bt 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 Next Bt 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 Next Bt Co, you can compare the effects of market volatilities on EBEST Investment and Next Bt 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 Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Next Bt.
Diversification Opportunities for EBEST Investment and Next Bt
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EBEST and Next is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt 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 Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of EBEST Investment i.e., EBEST Investment and Next Bt go up and down completely randomly.
Pair Corralation between EBEST Investment and Next Bt
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.43 times more return on investment than Next Bt. However, EBEST Investment Securities is 2.31 times less risky than Next Bt. It trades about -0.02 of its potential returns per unit of risk. Next Bt Co is currently generating about -0.04 per unit of risk. If you would invest 532,526 in EBEST Investment Securities on September 4, 2024 and sell it today you would lose (132,526) from holding EBEST Investment Securities or give up 24.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Next Bt Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Next Bt |
EBEST Investment and Next Bt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Next Bt
The main advantage of trading using opposite EBEST Investment and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.| EBEST Investment vs. ENERGYMACHINERY KOREA CoLtd | EBEST Investment vs. Hanshin Construction Co | EBEST Investment vs. Seohee Construction Co | EBEST Investment vs. Daejung Chemicals Metals |
| Next Bt vs. Hyundai Engineering Plastics | Next Bt vs. RF Materials Co | Next Bt vs. Ecoplastic | Next Bt vs. TOPMATERIAL LTD |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |