Correlation Between Eclat Textile and Grape King
Can any of the company-specific risk be diversified away by investing in both Eclat Textile and Grape King 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 Grape King 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 Grape King Bio, you can compare the effects of market volatilities on Eclat Textile and Grape King 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 Grape King. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eclat Textile and Grape King.
Diversification Opportunities for Eclat Textile and Grape King
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eclat and Grape is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Eclat Textile Co and Grape King Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grape King Bio 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 Grape King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grape King Bio has no effect on the direction of Eclat Textile i.e., Eclat Textile and Grape King go up and down completely randomly.
Pair Corralation between Eclat Textile and Grape King
Assuming the 90 days trading horizon Eclat Textile Co is expected to generate 0.96 times more return on investment than Grape King. However, Eclat Textile Co is 1.04 times less risky than Grape King. It trades about 0.24 of its potential returns per unit of risk. Grape King Bio is currently generating about -0.13 per unit of risk. If you would invest 50,700 in Eclat Textile Co on October 25, 2024 and sell it today you would earn a total of 2,300 from holding Eclat Textile Co or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eclat Textile Co vs. Grape King Bio
Performance |
| Timeline |
| Eclat Textile |
| Grape King Bio |
Eclat Textile and Grape King Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eclat Textile and Grape King
The main advantage of trading using opposite Eclat Textile and Grape King positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eclat Textile position performs unexpectedly, Grape King 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 Grape King will offset losses from the drop in Grape King's long position.| Eclat Textile vs. Tong Yang Industry | Eclat Textile vs. Ta Yih Industrial | Eclat Textile vs. Basso Industry Corp | Eclat Textile vs. China Motor Corp |
| Grape King vs. Standard Foods Corp | Grape King vs. Eclat Textile Co | Grape King vs. Feng Tay Enterprises | Grape King vs. China Steel Chemical |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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