Correlation Between EV Advanced and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both EV Advanced and EBEST Investment 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 EV Advanced and EBEST Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and EBEST Investment Securities, you can compare the effects of market volatilities on EV Advanced and EBEST Investment 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 EV Advanced with a short position of EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and EBEST Investment.
Diversification Opportunities for EV Advanced and EBEST Investment
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 131400 and EBEST is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec and EV Advanced 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 EV Advanced Material are associated (or correlated) with EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of EV Advanced i.e., EV Advanced and EBEST Investment go up and down completely randomly.
Pair Corralation between EV Advanced and EBEST Investment
Assuming the 90 days trading horizon EV Advanced Material is expected to generate 4.22 times more return on investment than EBEST Investment. However, EV Advanced is 4.22 times more volatile than EBEST Investment Securities. It trades about 0.03 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.25 per unit of risk. If you would invest 209,500 in EV Advanced Material on August 30, 2024 and sell it today you would earn a total of 2,500 from holding EV Advanced Material or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EV Advanced Material vs. EBEST Investment Securities
Performance |
| Timeline |
| EV Advanced Material |
| EBEST Investment Sec |
EV Advanced and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and EBEST Investment
The main advantage of trading using opposite EV Advanced and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| EV Advanced vs. Daou Data Corp | EV Advanced vs. Busan Industrial Co | EV Advanced vs. Busan Ind | EV Advanced vs. Shinhan WTI Futures |
| EBEST Investment vs. Cube Entertainment | EBEST Investment vs. Dreamus Company | EBEST Investment vs. LG Energy Solution | EBEST Investment vs. Dongwon System |
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 CEOs Directory module to screen CEOs from public companies around the world.
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