Correlation Between Eva Airways and Everlight Chemical
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Everlight Chemical 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 Eva Airways and Everlight Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eva Airways Corp and Everlight Chemical Industrial, you can compare the effects of market volatilities on Eva Airways and Everlight Chemical 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 Eva Airways with a short position of Everlight Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Everlight Chemical.
Diversification Opportunities for Eva Airways and Everlight Chemical
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eva and Everlight is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Everlight Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everlight Chemical and Eva Airways 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 Eva Airways Corp are associated (or correlated) with Everlight Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everlight Chemical has no effect on the direction of Eva Airways i.e., Eva Airways and Everlight Chemical go up and down completely randomly.
Pair Corralation between Eva Airways and Everlight Chemical
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 0.97 times more return on investment than Everlight Chemical. However, Eva Airways Corp is 1.03 times less risky than Everlight Chemical. It trades about 0.06 of its potential returns per unit of risk. Everlight Chemical Industrial is currently generating about 0.02 per unit of risk. If you would invest 2,890 in Eva Airways Corp on October 21, 2024 and sell it today you would earn a total of 1,875 from holding Eva Airways Corp or generate 64.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eva Airways Corp vs. Everlight Chemical Industrial
Performance |
| Timeline |
| Eva Airways Corp |
| Everlight Chemical |
Eva Airways and Everlight Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eva Airways and Everlight Chemical
The main advantage of trading using opposite Eva Airways and Everlight Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Everlight Chemical 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 Everlight Chemical will offset losses from the drop in Everlight Chemical's long position.| Eva Airways vs. China Airlines | Eva Airways vs. Evergreen Marine Corp | Eva Airways vs. Yang Ming Marine | Eva Airways vs. China Steel Corp |
| Everlight Chemical vs. Oriental Union Chemical | Everlight Chemical vs. Ho Tung Chemical | Everlight Chemical vs. China Man Made Fiber | Everlight Chemical vs. Sunko Ink 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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