Correlation Between Eva Airways and Aerospace Industrial
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Aerospace Industrial 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 Aerospace Industrial 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 Aerospace Industrial Development, you can compare the effects of market volatilities on Eva Airways and Aerospace Industrial 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 Aerospace Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Aerospace Industrial.
Diversification Opportunities for Eva Airways and Aerospace Industrial
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eva and Aerospace is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Aerospace Industrial Developme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerospace Industrial 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 Aerospace Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerospace Industrial has no effect on the direction of Eva Airways i.e., Eva Airways and Aerospace Industrial go up and down completely randomly.
Pair Corralation between Eva Airways and Aerospace Industrial
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 0.96 times more return on investment than Aerospace Industrial. However, Eva Airways Corp is 1.04 times less risky than Aerospace Industrial. It trades about 0.39 of its potential returns per unit of risk. Aerospace Industrial Development is currently generating about -0.07 per unit of risk. If you would invest 3,735 in Eva Airways Corp on August 31, 2024 and sell it today you would earn a total of 450.00 from holding Eva Airways Corp or generate 12.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eva Airways Corp vs. Aerospace Industrial Developme
Performance |
Timeline |
Eva Airways Corp |
Aerospace Industrial |
Eva Airways and Aerospace Industrial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eva Airways and Aerospace Industrial
The main advantage of trading using opposite Eva Airways and Aerospace Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Aerospace Industrial 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 Aerospace Industrial will offset losses from the drop in Aerospace Industrial's long position.Eva Airways vs. BES Engineering Co | Eva Airways vs. Continental Holdings Corp | Eva Airways vs. Kee Tai Properties | Eva Airways vs. Hung Sheng Construction |
Aerospace Industrial vs. CSBC Corp Taiwan | Aerospace Industrial vs. Eva Airways Corp | Aerospace Industrial vs. Taiwan High Speed | Aerospace Industrial vs. China Airlines |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |