Correlation Between Nan Ya and Enlight Corp
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Enlight Corp 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 Nan Ya and Enlight Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Plastics and Enlight Corp, you can compare the effects of market volatilities on Nan Ya and Enlight Corp 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 Nan Ya with a short position of Enlight Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Enlight Corp.
Diversification Opportunities for Nan Ya and Enlight Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nan and Enlight is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Enlight Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Corp and Nan Ya 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 Nan Ya Plastics are associated (or correlated) with Enlight Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Corp has no effect on the direction of Nan Ya i.e., Nan Ya and Enlight Corp go up and down completely randomly.
Pair Corralation between Nan Ya and Enlight Corp
Assuming the 90 days trading horizon Nan Ya Plastics is expected to generate 0.86 times more return on investment than Enlight Corp. However, Nan Ya Plastics is 1.16 times less risky than Enlight Corp. It trades about -0.35 of its potential returns per unit of risk. Enlight Corp is currently generating about -0.49 per unit of risk. If you would invest 4,095 in Nan Ya Plastics on September 13, 2024 and sell it today you would lose (495.00) from holding Nan Ya Plastics or give up 12.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nan Ya Plastics vs. Enlight Corp
Performance |
| Timeline |
| Nan Ya Plastics |
| Enlight Corp |
Nan Ya and Enlight Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Enlight Corp
The main advantage of trading using opposite Nan Ya and Enlight Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Enlight Corp 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 Enlight Corp will offset losses from the drop in Enlight Corp's long position.| Nan Ya vs. Tainan Spinning Co | Nan Ya vs. Lealea Enterprise Co | Nan Ya vs. China Petrochemical Development | Nan Ya vs. Ruentex Development Co |
| Enlight Corp vs. Gigastorage Corp | Enlight Corp vs. Amtran Technology Co | Enlight Corp vs. Silicon Integrated Systems | Enlight Corp vs. Chaintech Technology Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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