Correlation Between An Shin and Ever Supreme
Can any of the company-specific risk be diversified away by investing in both An Shin and Ever Supreme 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 An Shin and Ever Supreme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between An Shin Food Services and Ever Supreme Bio, you can compare the effects of market volatilities on An Shin and Ever Supreme 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 An Shin with a short position of Ever Supreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of An Shin and Ever Supreme.
Diversification Opportunities for An Shin and Ever Supreme
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1259 and Ever is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding An Shin Food Services and Ever Supreme Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Supreme Bio and An Shin 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 An Shin Food Services are associated (or correlated) with Ever Supreme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Supreme Bio has no effect on the direction of An Shin i.e., An Shin and Ever Supreme go up and down completely randomly.
Pair Corralation between An Shin and Ever Supreme
Assuming the 90 days trading horizon An Shin Food Services is expected to under-perform the Ever Supreme. But the stock apears to be less risky and, when comparing its historical volatility, An Shin Food Services is 1.13 times less risky than Ever Supreme. The stock trades about -0.09 of its potential returns per unit of risk. The Ever Supreme Bio is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 17,350 in Ever Supreme Bio on November 3, 2024 and sell it today you would earn a total of 500.00 from holding Ever Supreme Bio or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
An Shin Food Services vs. Ever Supreme Bio
Performance |
| Timeline |
| An Shin Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ever Supreme Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
An Shin and Ever Supreme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with An Shin and Ever Supreme
The main advantage of trading using opposite An Shin and Ever Supreme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if An Shin position performs unexpectedly, Ever Supreme 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 Ever Supreme will offset losses from the drop in Ever Supreme's long position.The idea behind An Shin Food Services and Ever Supreme Bio 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.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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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