Correlation Between EnTie Commercial and Sentronic International
Can any of the company-specific risk be diversified away by investing in both EnTie Commercial and Sentronic International 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 Sentronic International 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 Sentronic International, you can compare the effects of market volatilities on EnTie Commercial and Sentronic International 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 Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnTie Commercial and Sentronic International.
Diversification Opportunities for EnTie Commercial and Sentronic International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EnTie and Sentronic is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding EnTie Commercial Bank and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International 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 Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of EnTie Commercial i.e., EnTie Commercial and Sentronic International go up and down completely randomly.
Pair Corralation between EnTie Commercial and Sentronic International
Assuming the 90 days trading horizon EnTie Commercial Bank is expected to generate 0.51 times more return on investment than Sentronic International. However, EnTie Commercial Bank is 1.95 times less risky than Sentronic International. It trades about 0.0 of its potential returns per unit of risk. Sentronic International is currently generating about -0.02 per unit of risk. If you would invest 1,475 in EnTie Commercial Bank on September 14, 2024 and sell it today you would lose (65.00) from holding EnTie Commercial Bank or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
EnTie Commercial Bank vs. Sentronic International
Performance |
| Timeline |
| EnTie Commercial Bank |
| Sentronic International |
EnTie Commercial and Sentronic International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnTie Commercial and Sentronic International
The main advantage of trading using opposite EnTie Commercial and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnTie Commercial position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International'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 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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