Correlation Between Eugene Technology and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Eugene Technology and NewFlex 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 Eugene Technology and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eugene Technology CoLtd and NewFlex Technology Co, you can compare the effects of market volatilities on Eugene Technology and NewFlex 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 Eugene Technology with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Technology and NewFlex Technology.
Diversification Opportunities for Eugene Technology and NewFlex Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eugene and NewFlex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Technology CoLtd and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and Eugene 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 Eugene Technology CoLtd are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Eugene Technology i.e., Eugene Technology and NewFlex Technology go up and down completely randomly.
Pair Corralation between Eugene Technology and NewFlex Technology
Assuming the 90 days trading horizon Eugene Technology CoLtd is expected to generate 1.37 times more return on investment than NewFlex Technology. However, Eugene Technology is 1.37 times more volatile than NewFlex Technology Co. It trades about 0.13 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.11 per unit of risk. If you would invest 3,775,000 in Eugene Technology CoLtd on December 8, 2024 and sell it today you would earn a total of 285,000 from holding Eugene Technology CoLtd or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eugene Technology CoLtd vs. NewFlex Technology Co
Performance |
| Timeline |
| Eugene Technology CoLtd |
| NewFlex Technology |
Eugene Technology and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eugene Technology and NewFlex Technology
The main advantage of trading using opposite Eugene Technology and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eugene Technology position performs unexpectedly, NewFlex 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Eugene Technology vs. Daedong Steel Co | Eugene Technology vs. Ssangyong Information Communication | Eugene Technology vs. Nice Information Telecommunication | Eugene Technology vs. Insung Information Co |
| NewFlex Technology vs. Asiana Airlines | NewFlex Technology vs. Display Tech Co | NewFlex Technology vs. Samick Musical Instruments | NewFlex Technology vs. LG Household Healthcare |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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