Correlation Between Eclat Textile and President Chain
Can any of the company-specific risk be diversified away by investing in both Eclat Textile and President Chain 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 President Chain 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 President Chain Store, you can compare the effects of market volatilities on Eclat Textile and President Chain 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 President Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eclat Textile and President Chain.
Diversification Opportunities for Eclat Textile and President Chain
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eclat and President is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eclat Textile Co and President Chain Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Chain Store 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 President Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Chain Store has no effect on the direction of Eclat Textile i.e., Eclat Textile and President Chain go up and down completely randomly.
Pair Corralation between Eclat Textile and President Chain
Assuming the 90 days trading horizon Eclat Textile Co is expected to generate 1.48 times more return on investment than President Chain. However, Eclat Textile is 1.48 times more volatile than President Chain Store. It trades about 0.04 of its potential returns per unit of risk. President Chain Store is currently generating about -0.2 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eclat Textile Co vs. President Chain Store
Performance |
| Timeline |
| Eclat Textile |
| President Chain Store |
Eclat Textile and President Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eclat Textile and President Chain
The main advantage of trading using opposite Eclat Textile and President Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eclat Textile position performs unexpectedly, President Chain 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 President Chain will offset losses from the drop in President Chain's long position.| Eclat Textile vs. Makalot Industrial Co | Eclat Textile vs. Feng Tay Enterprises | Eclat Textile vs. President Chain Store | Eclat Textile vs. Uni President Enterprises Corp |
| President Chain vs. Uni President Enterprises Corp | President Chain vs. Formosa Plastics Corp | President Chain vs. Chunghwa Telecom Co | President Chain vs. Fubon Financial Holding |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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