Correlation Between EnTie Commercial and Newretail
Can any of the company-specific risk be diversified away by investing in both EnTie Commercial and Newretail 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 EnTie Commercial and Newretail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EnTie Commercial Bank and Newretail Co, you can compare the effects of market volatilities on EnTie Commercial and Newretail 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 EnTie Commercial with a short position of Newretail. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnTie Commercial and Newretail.
Diversification Opportunities for EnTie Commercial and Newretail
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EnTie and Newretail is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding EnTie Commercial Bank and Newretail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newretail and EnTie Commercial 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 EnTie Commercial Bank are associated (or correlated) with Newretail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newretail has no effect on the direction of EnTie Commercial i.e., EnTie Commercial and Newretail go up and down completely randomly.
Pair Corralation between EnTie Commercial and Newretail
Assuming the 90 days trading horizon EnTie Commercial is expected to generate 11.46 times less return on investment than Newretail. But when comparing it to its historical volatility, EnTie Commercial Bank is 2.54 times less risky than Newretail. It trades about 0.04 of its potential returns per unit of risk. Newretail Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,180 in Newretail Co on September 15, 2024 and sell it today you would earn a total of 310.00 from holding Newretail Co or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EnTie Commercial Bank vs. Newretail Co
Performance |
| Timeline |
| EnTie Commercial Bank |
| Newretail |
EnTie Commercial and Newretail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnTie Commercial and Newretail
The main advantage of trading using opposite EnTie Commercial and Newretail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnTie Commercial position performs unexpectedly, Newretail 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 Newretail will offset losses from the drop in Newretail's long position.| EnTie Commercial vs. Central Reinsurance Corp | EnTie Commercial vs. Huaku Development Co | EnTie Commercial vs. Fubon Financial Holding | EnTie Commercial vs. Chailease Holding Co |
| Newretail vs. President Chain Store | Newretail vs. Uni President Enterprises Corp | Newretail vs. Eclat Textile Co | Newretail vs. Ruentex Development 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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