Correlation Between E Lead and Apex Biotechnology
Can any of the company-specific risk be diversified away by investing in both E Lead and Apex Biotechnology 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 E Lead and Apex Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Lead Electronic Co and Apex Biotechnology Corp, you can compare the effects of market volatilities on E Lead and Apex Biotechnology 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 E Lead with a short position of Apex Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Lead and Apex Biotechnology.
Diversification Opportunities for E Lead and Apex Biotechnology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2497 and Apex is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding E Lead Electronic Co and Apex Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Biotechnology Corp and E Lead 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 E Lead Electronic Co are associated (or correlated) with Apex Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Biotechnology Corp has no effect on the direction of E Lead i.e., E Lead and Apex Biotechnology go up and down completely randomly.
Pair Corralation between E Lead and Apex Biotechnology
Assuming the 90 days trading horizon E Lead Electronic Co is expected to generate 2.15 times more return on investment than Apex Biotechnology. However, E Lead is 2.15 times more volatile than Apex Biotechnology Corp. It trades about 0.04 of its potential returns per unit of risk. Apex Biotechnology Corp is currently generating about -0.07 per unit of risk. If you would invest 5,900 in E Lead Electronic Co on September 1, 2024 and sell it today you would earn a total of 550.00 from holding E Lead Electronic Co or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
E Lead Electronic Co vs. Apex Biotechnology Corp
Performance |
| Timeline |
| E Lead Electronic |
| Apex Biotechnology Corp |
E Lead and Apex Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Lead and Apex Biotechnology
The main advantage of trading using opposite E Lead and Apex Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Lead position performs unexpectedly, Apex Biotechnology 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 Apex Biotechnology will offset losses from the drop in Apex Biotechnology's long position.| E Lead vs. Chaintech Technology Corp | E Lead vs. AVerMedia Technologies | E Lead vs. Avision | E Lead vs. Clevo Co |
| Apex Biotechnology vs. Taiwan Semiconductor Manufacturing | Apex Biotechnology vs. Hon Hai Precision | Apex Biotechnology vs. MediaTek | Apex Biotechnology vs. Chunghwa Telecom Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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