Correlation Between SS TECH and ENF Technology
Can any of the company-specific risk be diversified away by investing in both SS TECH 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 SS TECH and ENF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and ENF Technology Co, you can compare the effects of market volatilities on SS TECH 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 SS TECH with a short position of ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and ENF Technology.
Diversification Opportunities for SS TECH and ENF Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 101490 and ENF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology and SS TECH 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 SS TECH 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 SS TECH i.e., SS TECH and ENF Technology go up and down completely randomly.
Pair Corralation between SS TECH and ENF Technology
Assuming the 90 days trading horizon SS TECH is expected to generate 1.06 times less return on investment than ENF Technology. But when comparing it to its historical volatility, SS TECH is 1.28 times less risky than ENF Technology. It trades about 0.37 of its potential returns per unit of risk. ENF Technology Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,682,000 in ENF Technology Co on October 29, 2024 and sell it today you would earn a total of 363,000 from holding ENF Technology Co or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. ENF Technology Co
Performance |
| Timeline |
| SS TECH |
| ENF Technology |
SS TECH and ENF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and ENF Technology
The main advantage of trading using opposite SS TECH and ENF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH 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.The idea behind SS TECH and ENF Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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