Correlation Between Transcend Information and Eagle Cold
Can any of the company-specific risk be diversified away by investing in both Transcend Information and Eagle Cold 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 Transcend Information and Eagle Cold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcend Information and Eagle Cold Storage, you can compare the effects of market volatilities on Transcend Information and Eagle Cold 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 Transcend Information with a short position of Eagle Cold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcend Information and Eagle Cold.
Diversification Opportunities for Transcend Information and Eagle Cold
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transcend and Eagle is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Transcend Information and Eagle Cold Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Cold Storage and Transcend Information 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 Transcend Information are associated (or correlated) with Eagle Cold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Cold Storage has no effect on the direction of Transcend Information i.e., Transcend Information and Eagle Cold go up and down completely randomly.
Pair Corralation between Transcend Information and Eagle Cold
Assuming the 90 days trading horizon Transcend Information is expected to under-perform the Eagle Cold. But the stock apears to be less risky and, when comparing its historical volatility, Transcend Information is 1.14 times less risky than Eagle Cold. The stock trades about -0.13 of its potential returns per unit of risk. The Eagle Cold Storage is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,015 in Eagle Cold Storage on September 5, 2024 and sell it today you would lose (35.00) from holding Eagle Cold Storage or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcend Information vs. Eagle Cold Storage
Performance |
| Timeline |
| Transcend Information |
| Eagle Cold Storage |
Transcend Information and Eagle Cold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcend Information and Eagle Cold
The main advantage of trading using opposite Transcend Information and Eagle Cold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcend Information position performs unexpectedly, Eagle Cold 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 Eagle Cold will offset losses from the drop in Eagle Cold's long position.| Transcend Information vs. Taiwan Semiconductor Manufacturing | Transcend Information vs. Yang Ming Marine | Transcend Information vs. AU Optronics | Transcend Information vs. Nan Ya Plastics |
| Eagle Cold vs. Uni President Enterprises Corp | Eagle Cold vs. Lien Hwa Industrial | Eagle Cold vs. Great Wall Enterprise | Eagle Cold vs. Standard Foods 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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