Correlation Between Eugene Technology and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Eugene Technology and Amogreentech 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 Amogreentech 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 Amogreentech Co, you can compare the effects of market volatilities on Eugene Technology and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Technology and Amogreentech.
Diversification Opportunities for Eugene Technology and Amogreentech
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eugene and Amogreentech is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Technology CoLtd and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Eugene Technology i.e., Eugene Technology and Amogreentech go up and down completely randomly.
Pair Corralation between Eugene Technology and Amogreentech
Assuming the 90 days trading horizon Eugene Technology CoLtd is expected to under-perform the Amogreentech. But the stock apears to be less risky and, when comparing its historical volatility, Eugene Technology CoLtd is 1.13 times less risky than Amogreentech. The stock trades about -0.14 of its potential returns per unit of risk. The Amogreentech Co is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 795,000 in Amogreentech Co on September 2, 2024 and sell it today you would lose (188,000) from holding Amogreentech Co or give up 23.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eugene Technology CoLtd vs. Amogreentech Co
Performance |
| Timeline |
| Eugene Technology CoLtd |
| Amogreentech |
Eugene Technology and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eugene Technology and Amogreentech
The main advantage of trading using opposite Eugene Technology and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eugene Technology position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| Eugene Technology vs. Korea Investment Holdings | Eugene Technology vs. PLAYWITH | Eugene Technology vs. DB Financial Investment | Eugene Technology vs. LB Investment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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