Correlation Between NewFlex Technology and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and Eagle Veterinary 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 NewFlex Technology and Eagle Veterinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Eagle Veterinary Technology, you can compare the effects of market volatilities on NewFlex Technology and Eagle Veterinary 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 NewFlex Technology with a short position of Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Eagle Veterinary.
Diversification Opportunities for NewFlex Technology and Eagle Veterinary
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NewFlex and Eagle is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec and NewFlex 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 NewFlex Technology Co are associated (or correlated) with Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and Eagle Veterinary go up and down completely randomly.
Pair Corralation between NewFlex Technology and Eagle Veterinary
Assuming the 90 days trading horizon NewFlex Technology Co is expected to generate 1.61 times more return on investment than Eagle Veterinary. However, NewFlex Technology is 1.61 times more volatile than Eagle Veterinary Technology. It trades about -0.01 of its potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.01 per unit of risk. If you would invest 764,000 in NewFlex Technology Co on September 4, 2024 and sell it today you would lose (315,000) from holding NewFlex Technology Co or give up 41.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Eagle Veterinary Technology
Performance |
| Timeline |
| NewFlex Technology |
| Eagle Veterinary Tec |
NewFlex Technology and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Eagle Veterinary
The main advantage of trading using opposite NewFlex Technology and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| NewFlex Technology vs. PJ Metal Co | NewFlex Technology vs. MetaLabs Co | NewFlex Technology vs. ECSTELECOM Co | NewFlex Technology vs. SK Telecom Co |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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