Correlation Between Elite Material and Career Technology
Can any of the company-specific risk be diversified away by investing in both Elite Material and Career Technology 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 Career Technology 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 Career Technology MFG, you can compare the effects of market volatilities on Elite Material and Career Technology 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 Career Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Material and Career Technology.
Diversification Opportunities for Elite Material and Career Technology
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elite and Career is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Elite Material Co and Career Technology MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Career Technology MFG 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 Career Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Career Technology MFG has no effect on the direction of Elite Material i.e., Elite Material and Career Technology go up and down completely randomly.
Pair Corralation between Elite Material and Career Technology
Assuming the 90 days trading horizon Elite Material Co is expected to generate 0.96 times more return on investment than Career Technology. However, Elite Material Co is 1.04 times less risky than Career Technology. It trades about 0.02 of its potential returns per unit of risk. Career Technology MFG is currently generating about -0.11 per unit of risk. If you would invest 59,600 in Elite Material Co on October 21, 2024 and sell it today you would earn a total of 200.00 from holding Elite Material Co or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Material Co vs. Career Technology MFG
Performance |
| Timeline |
| Elite Material |
| Career Technology MFG |
Elite Material and Career Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Material and Career Technology
The main advantage of trading using opposite Elite Material and Career Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Material position performs unexpectedly, Career Technology 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 Career Technology will offset losses from the drop in Career Technology'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 |
| Career Technology vs. ASRock Inc | Career Technology vs. FIC Global | Career Technology vs. In Win Development | Career Technology vs. Getac Technology Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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