Correlation Between Eclat Textile and Makalot Industrial
Can any of the company-specific risk be diversified away by investing in both Eclat Textile and Makalot Industrial 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 Eclat Textile and Makalot Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eclat Textile Co and Makalot Industrial Co, you can compare the effects of market volatilities on Eclat Textile and Makalot Industrial 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 Eclat Textile with a short position of Makalot Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eclat Textile and Makalot Industrial.
Diversification Opportunities for Eclat Textile and Makalot Industrial
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eclat and Makalot is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eclat Textile Co and Makalot Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Makalot Industrial and Eclat Textile 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 Eclat Textile Co are associated (or correlated) with Makalot Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Makalot Industrial has no effect on the direction of Eclat Textile i.e., Eclat Textile and Makalot Industrial go up and down completely randomly.
Pair Corralation between Eclat Textile and Makalot Industrial
Assuming the 90 days trading horizon Eclat Textile Co is expected to generate 0.76 times more return on investment than Makalot Industrial. However, Eclat Textile Co is 1.31 times less risky than Makalot Industrial. It trades about 0.04 of its potential returns per unit of risk. Makalot Industrial Co is currently generating about -0.05 per unit of risk. If you would invest 54,300 in Eclat Textile Co on August 29, 2024 and sell it today you would earn a total of 900.00 from holding Eclat Textile Co or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eclat Textile Co vs. Makalot Industrial Co
Performance |
| Timeline |
| Eclat Textile |
| Makalot Industrial |
Eclat Textile and Makalot Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eclat Textile and Makalot Industrial
The main advantage of trading using opposite Eclat Textile and Makalot Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eclat Textile position performs unexpectedly, Makalot Industrial 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 Makalot Industrial will offset losses from the drop in Makalot Industrial's long position.| Eclat Textile vs. Taiwan Semiconductor Manufacturing | Eclat Textile vs. Hon Hai Precision | Eclat Textile vs. MediaTek | Eclat Textile vs. Chunghwa Telecom Co |
| Makalot Industrial vs. Taiwan Semiconductor Manufacturing | Makalot Industrial vs. Hon Hai Precision | Makalot Industrial vs. MediaTek | Makalot Industrial vs. Chunghwa Telecom 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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