Correlation Between Elite Material and Thinking Electronic
Can any of the company-specific risk be diversified away by investing in both Elite Material and Thinking Electronic 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 Elite Material and Thinking Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Material Co and Thinking Electronic Industrial, you can compare the effects of market volatilities on Elite Material and Thinking Electronic 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 Elite Material with a short position of Thinking Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Material and Thinking Electronic.
Diversification Opportunities for Elite Material and Thinking Electronic
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elite and Thinking is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Elite Material Co and Thinking Electronic Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinking Electronic and Elite Material 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 Elite Material Co are associated (or correlated) with Thinking Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinking Electronic has no effect on the direction of Elite Material i.e., Elite Material and Thinking Electronic go up and down completely randomly.
Pair Corralation between Elite Material and Thinking Electronic
Assuming the 90 days trading horizon Elite Material Co is expected to under-perform the Thinking Electronic. In addition to that, Elite Material is 1.22 times more volatile than Thinking Electronic Industrial. It trades about 0.0 of its total potential returns per unit of risk. Thinking Electronic Industrial is currently generating about 0.16 per unit of volatility. If you would invest 15,500 in Thinking Electronic Industrial on October 24, 2024 and sell it today you would earn a total of 950.00 from holding Thinking Electronic Industrial or generate 6.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elite Material Co vs. Thinking Electronic Industrial
Performance |
Timeline |
Elite Material |
Thinking Electronic |
Elite Material and Thinking Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elite Material and Thinking Electronic
The main advantage of trading using opposite Elite Material and Thinking Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Material position performs unexpectedly, Thinking Electronic 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 Thinking Electronic will offset losses from the drop in Thinking Electronic's long position.Elite Material vs. Compeq Manufacturing Co | Elite Material vs. ITEQ Corp | Elite Material vs. Unimicron Technology Corp | Elite Material vs. Chicony Electronics Co |
Thinking Electronic vs. Polytronics Technology Corp | Thinking Electronic vs. Greatek Electronics | Thinking Electronic vs. Elite Material Co | Thinking Electronic vs. Sunonwealth Electric Machine |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Stocks Directory Find actively traded stocks across global markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |