Correlation Between ENF Technology and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both ENF Technology and Adaptive Plasma 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 Adaptive Plasma 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 Adaptive Plasma Technology, you can compare the effects of market volatilities on ENF Technology and Adaptive Plasma 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 Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENF Technology and Adaptive Plasma.
Diversification Opportunities for ENF Technology and Adaptive Plasma
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ENF and Adaptive is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ENF Technology Co and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech 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 Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of ENF Technology i.e., ENF Technology and Adaptive Plasma go up and down completely randomly.
Pair Corralation between ENF Technology and Adaptive Plasma
Assuming the 90 days trading horizon ENF Technology Co is expected to generate 1.24 times more return on investment than Adaptive Plasma. However, ENF Technology is 1.24 times more volatile than Adaptive Plasma Technology. It trades about 0.32 of its potential returns per unit of risk. Adaptive Plasma Technology is currently generating about 0.26 per unit of risk. If you would invest 1,657,000 in ENF Technology Co on October 28, 2024 and sell it today you would earn a total of 388,000 from holding ENF Technology Co or generate 23.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENF Technology Co vs. Adaptive Plasma Technology
Performance |
| Timeline |
| ENF Technology |
| Adaptive Plasma Tech |
ENF Technology and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENF Technology and Adaptive Plasma
The main advantage of trading using opposite ENF Technology and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENF Technology position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma's long position.| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings Co |
| Adaptive Plasma vs. MEDIANA CoLtd | Adaptive Plasma vs. Namhwa Industrial Co | Adaptive Plasma vs. Tamul Multimedia Co | Adaptive Plasma vs. Korea Industrial 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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