Correlation Between HB Technology and ENF Technology
Can any of the company-specific risk be diversified away by investing in both HB Technology 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 HB Technology and ENF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HB Technology TD and ENF Technology Co, you can compare the effects of market volatilities on HB Technology 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 HB Technology with a short position of ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and ENF Technology.
Diversification Opportunities for HB Technology and ENF Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 078150 and ENF is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology and HB Technology 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 HB Technology TD 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 HB Technology i.e., HB Technology and ENF Technology go up and down completely randomly.
Pair Corralation between HB Technology and ENF Technology
Assuming the 90 days trading horizon HB Technology TD is expected to generate 1.41 times more return on investment than ENF Technology. However, HB Technology is 1.41 times more volatile than ENF Technology Co. It trades about 0.07 of its potential returns per unit of risk. ENF Technology Co is currently generating about 0.01 per unit of risk. If you would invest 213,500 in HB Technology TD on November 6, 2024 and sell it today you would earn a total of 7,500 from holding HB Technology TD or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. ENF Technology Co
Performance |
| Timeline |
| HB Technology TD |
| ENF Technology |
HB Technology and ENF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and ENF Technology
The main advantage of trading using opposite HB Technology and ENF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB Technology 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.| HB Technology vs. INSUN Environmental New | HB Technology vs. Hironic Co | HB Technology vs. Sangsin Energy Display | HB Technology vs. Nature and Environment |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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