Correlation Between Century Wind and Easywell Biomedicals
Can any of the company-specific risk be diversified away by investing in both Century Wind and Easywell Biomedicals 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 Century Wind and Easywell Biomedicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and Easywell Biomedicals, you can compare the effects of market volatilities on Century Wind and Easywell Biomedicals 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 Century Wind with a short position of Easywell Biomedicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Easywell Biomedicals.
Diversification Opportunities for Century Wind and Easywell Biomedicals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Century and Easywell is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Easywell Biomedicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easywell Biomedicals and Century Wind 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 Century Wind Power are associated (or correlated) with Easywell Biomedicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easywell Biomedicals has no effect on the direction of Century Wind i.e., Century Wind and Easywell Biomedicals go up and down completely randomly.
Pair Corralation between Century Wind and Easywell Biomedicals
Assuming the 90 days trading horizon Century Wind is expected to generate 3.33 times less return on investment than Easywell Biomedicals. But when comparing it to its historical volatility, Century Wind Power is 1.4 times less risky than Easywell Biomedicals. It trades about 0.09 of its potential returns per unit of risk. Easywell Biomedicals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,160 in Easywell Biomedicals on November 27, 2024 and sell it today you would earn a total of 640.00 from holding Easywell Biomedicals or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Wind Power vs. Easywell Biomedicals
Performance |
| Timeline |
| Century Wind Power |
| Easywell Biomedicals |
Century Wind and Easywell Biomedicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Wind and Easywell Biomedicals
The main advantage of trading using opposite Century Wind and Easywell Biomedicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind position performs unexpectedly, Easywell Biomedicals 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 Easywell Biomedicals will offset losses from the drop in Easywell Biomedicals' long position.| Century Wind vs. Loop Telecommunication International | Century Wind vs. Farglory Life Insurance | Century Wind vs. Easywell Biomedicals | Century Wind vs. First Insurance Co |
| Easywell Biomedicals vs. Universal Vision Biotechnology | Easywell Biomedicals vs. Excelsior Medical Co | Easywell Biomedicals vs. Delta Asia International | Easywell Biomedicals vs. Hi Clearance |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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