Correlation Between EBEST Investment and Robostar CoLtd
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Robostar CoLtd 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 Robostar CoLtd 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 Robostar CoLtd, you can compare the effects of market volatilities on EBEST Investment and Robostar CoLtd 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 Robostar CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Robostar CoLtd.
Diversification Opportunities for EBEST Investment and Robostar CoLtd
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EBEST and Robostar is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Robostar CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robostar CoLtd 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 Robostar CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robostar CoLtd has no effect on the direction of EBEST Investment i.e., EBEST Investment and Robostar CoLtd go up and down completely randomly.
Pair Corralation between EBEST Investment and Robostar CoLtd
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Robostar CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 2.41 times less risky than Robostar CoLtd. The stock trades about -0.25 of its potential returns per unit of risk. The Robostar CoLtd is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,120,000 in Robostar CoLtd on August 30, 2024 and sell it today you would earn a total of 200,000 from holding Robostar CoLtd or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Robostar CoLtd
Performance |
| Timeline |
| EBEST Investment Sec |
| Robostar CoLtd |
EBEST Investment and Robostar CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Robostar CoLtd
The main advantage of trading using opposite EBEST Investment and Robostar CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Robostar CoLtd 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 Robostar CoLtd will offset losses from the drop in Robostar CoLtd's long position.| EBEST Investment vs. Cube Entertainment | EBEST Investment vs. Dreamus Company | EBEST Investment vs. LG Energy Solution | EBEST Investment vs. Dongwon System |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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