Correlation Between Eva Airways and Aero Win
Can any of the company-specific risk be diversified away by investing in both Eva Airways and Aero Win 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 Aero Win 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 Aero Win Technology, you can compare the effects of market volatilities on Eva Airways and Aero Win 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 Aero Win. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and Aero Win.
Diversification Opportunities for Eva Airways and Aero Win
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eva and Aero is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and Aero Win Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aero Win 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 Aero Win. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aero Win Technology has no effect on the direction of Eva Airways i.e., Eva Airways and Aero Win go up and down completely randomly.
Pair Corralation between Eva Airways and Aero Win
Assuming the 90 days trading horizon Eva Airways Corp is expected to generate 0.68 times more return on investment than Aero Win. However, Eva Airways Corp is 1.47 times less risky than Aero Win. It trades about 0.06 of its potential returns per unit of risk. Aero Win Technology is currently generating about 0.04 per unit of risk. If you would invest 2,870 in Eva Airways Corp on September 12, 2024 and sell it today you would earn a total of 1,750 from holding Eva Airways Corp or generate 60.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eva Airways Corp vs. Aero Win Technology
Performance |
| Timeline |
| Eva Airways Corp |
| Aero Win Technology |
Eva Airways and Aero Win Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eva Airways and Aero Win
The main advantage of trading using opposite Eva Airways and Aero Win positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, Aero Win 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 Aero Win will offset losses from the drop in Aero Win'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 |
| Aero Win vs. CSBC Corp Taiwan | Aero Win vs. Tong Tai Machine Tool | Aero Win vs. Super Dragon Technology | Aero Win vs. Victory New Materials |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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