Correlation Between Eva Airways and Sunplus Technology
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Sunplus 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 Eva Airways and Sunplus Technology 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 Sunplus Technology Co, you can compare the effects of market volatilities on Eva Airways and Sunplus 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 Eva Airways with a short position of Sunplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Sunplus Technology.
Diversification Opportunities for Eva Airways and Sunplus Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eva and Sunplus is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Sunplus Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunplus Technology 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 Sunplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunplus Technology has no effect on the direction of Eva Airways i.e., Eva Airways and Sunplus Technology go up and down completely randomly.
Pair Corralation between Eva Airways and Sunplus Technology
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 0.5 times more return on investment than Sunplus Technology. However, Eva Airways Corp is 2.0 times less risky than Sunplus Technology. It trades about 0.19 of its potential returns per unit of risk. Sunplus Technology Co is currently generating about 0.01 per unit of risk. If you would invest 4,455 in Eva Airways Corp on October 20, 2024 and sell it today you would earn a total of 310.00 from holding Eva Airways Corp or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eva Airways Corp vs. Sunplus Technology Co
Performance |
| Timeline |
| Eva Airways Corp |
| Sunplus Technology |
Eva Airways and Sunplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eva Airways and Sunplus Technology
The main advantage of trading using opposite Eva Airways and Sunplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Sunplus 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 Sunplus Technology will offset losses from the drop in Sunplus Technology'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 |
| Sunplus Technology vs. Realtek Semiconductor Corp | Sunplus Technology vs. VIA Technologies | Sunplus Technology vs. Silicon Integrated Systems | Sunplus Technology vs. Winbond Electronics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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