Correlation Between ECM Libra and YX Precious
Can any of the company-specific risk be diversified away by investing in both ECM Libra and YX Precious 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 ECM Libra and YX Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECM Libra Financial and YX Precious Metals, you can compare the effects of market volatilities on ECM Libra and YX Precious 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 ECM Libra with a short position of YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECM Libra and YX Precious.
Diversification Opportunities for ECM Libra and YX Precious
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ECM and 0250 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ECM Libra Financial and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals and ECM Libra 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 ECM Libra Financial are associated (or correlated) with YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of ECM Libra i.e., ECM Libra and YX Precious go up and down completely randomly.
Pair Corralation between ECM Libra and YX Precious
Assuming the 90 days trading horizon ECM Libra Financial is expected to generate 2.01 times more return on investment than YX Precious. However, ECM Libra is 2.01 times more volatile than YX Precious Metals. It trades about 0.02 of its potential returns per unit of risk. YX Precious Metals is currently generating about 0.01 per unit of risk. If you would invest 18.00 in ECM Libra Financial on November 3, 2024 and sell it today you would earn a total of 0.00 from holding ECM Libra Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECM Libra Financial vs. YX Precious Metals
Performance |
| Timeline |
| ECM Libra Financial |
| YX Precious Metals |
ECM Libra and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECM Libra and YX Precious
The main advantage of trading using opposite ECM Libra and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECM Libra position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| ECM Libra vs. Farm Price Holdings | ECM Libra vs. Steel Hawk Berhad | ECM Libra vs. Lysaght Galvanized Steel | ECM Libra vs. CPE Technology Berhad |
| YX Precious vs. Resintech Bhd | YX Precious vs. Computer Forms Bhd | YX Precious vs. MI Technovation Bhd | YX Precious vs. Uchi Technologies Bhd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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