Correlation Between Easywell Biomedicals and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Easywell Biomedicals and StShine Optical 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 Easywell Biomedicals and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easywell Biomedicals and StShine Optical Co, you can compare the effects of market volatilities on Easywell Biomedicals and StShine Optical 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 Easywell Biomedicals with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easywell Biomedicals and StShine Optical.
Diversification Opportunities for Easywell Biomedicals and StShine Optical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Easywell and StShine is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Easywell Biomedicals and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Easywell Biomedicals 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 Easywell Biomedicals are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Easywell Biomedicals i.e., Easywell Biomedicals and StShine Optical go up and down completely randomly.
Pair Corralation between Easywell Biomedicals and StShine Optical
Assuming the 90 days trading horizon Easywell Biomedicals is expected to generate 2.91 times more return on investment than StShine Optical. However, Easywell Biomedicals is 2.91 times more volatile than StShine Optical Co. It trades about 0.09 of its potential returns per unit of risk. StShine Optical Co is currently generating about -0.02 per unit of risk. If you would invest 1,617 in Easywell Biomedicals on November 20, 2024 and sell it today you would earn a total of 4,603 from holding Easywell Biomedicals or generate 284.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easywell Biomedicals vs. StShine Optical Co
Performance |
| Timeline |
| Easywell Biomedicals |
| StShine Optical |
Easywell Biomedicals and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easywell Biomedicals and StShine Optical
The main advantage of trading using opposite Easywell Biomedicals and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easywell Biomedicals position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Easywell Biomedicals vs. Dadi Early Childhood Education | Easywell Biomedicals vs. Song Ho Industrial | Easywell Biomedicals vs. Wha Yu Industrial | Easywell Biomedicals vs. PChome Online |
| StShine Optical vs. New Asia Construction | StShine Optical vs. Lihtai Construction Enterprise | StShine Optical vs. TECO Electric Machinery | StShine Optical vs. Chong Hong Construction |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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