Correlation Between ENF Technology and APS Holdings
Can any of the company-specific risk be diversified away by investing in both ENF Technology and APS Holdings 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 ENF Technology and APS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENF Technology Co and APS Holdings, you can compare the effects of market volatilities on ENF Technology and APS Holdings 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 ENF Technology with a short position of APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENF Technology and APS Holdings.
Diversification Opportunities for ENF Technology and APS Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ENF and APS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ENF Technology Co and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings and ENF 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 ENF Technology Co are associated (or correlated) with APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of ENF Technology i.e., ENF Technology and APS Holdings go up and down completely randomly.
Pair Corralation between ENF Technology and APS Holdings
Assuming the 90 days trading horizon ENF Technology Co is expected to generate 2.94 times more return on investment than APS Holdings. However, ENF Technology is 2.94 times more volatile than APS Holdings. It trades about 0.32 of its potential returns per unit of risk. APS Holdings is currently generating about -0.48 per unit of risk. If you would invest 1,693,867 in ENF Technology Co on October 25, 2024 and sell it today you would earn a total of 366,133 from holding ENF Technology Co or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
ENF Technology Co vs. APS Holdings
Performance |
| Timeline |
| ENF Technology |
| APS Holdings |
ENF Technology and APS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENF Technology and APS Holdings
The main advantage of trading using opposite ENF Technology and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENF Technology position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.| ENF Technology vs. LG Chemicals | ENF Technology vs. POSCO Holdings | ENF Technology vs. Hanwha Solutions | ENF Technology vs. Lotte Chemical Corp |
| APS Holdings vs. Tway Air Co | APS Holdings vs. Daejung Chemicals Metals | APS Holdings vs. Cloud Air CoLtd | APS Holdings vs. LEENO Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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