Correlation Between EnTie Commercial and Sporton International
Can any of the company-specific risk be diversified away by investing in both EnTie Commercial and Sporton 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 Sporton 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 Sporton International, you can compare the effects of market volatilities on EnTie Commercial and Sporton 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 Sporton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnTie Commercial and Sporton International.
Diversification Opportunities for EnTie Commercial and Sporton International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EnTie and Sporton is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding EnTie Commercial Bank and Sporton International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporton 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 Sporton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporton International has no effect on the direction of EnTie Commercial i.e., EnTie Commercial and Sporton International go up and down completely randomly.
Pair Corralation between EnTie Commercial and Sporton International
Assuming the 90 days trading horizon EnTie Commercial Bank is expected to generate 1.17 times more return on investment than Sporton International. However, EnTie Commercial is 1.17 times more volatile than Sporton International. It trades about 0.02 of its potential returns per unit of risk. Sporton International is currently generating about -0.15 per unit of risk. If you would invest 1,465 in EnTie Commercial Bank on September 3, 2024 and sell it today you would earn a total of 5.00 from holding EnTie Commercial Bank or generate 0.34% 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. Sporton International
Performance |
| Timeline |
| EnTie Commercial Bank |
| Sporton International |
EnTie Commercial and Sporton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnTie Commercial and Sporton International
The main advantage of trading using opposite EnTie Commercial and Sporton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnTie Commercial position performs unexpectedly, Sporton 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 Sporton International will offset losses from the drop in Sporton International's long position.| EnTie Commercial vs. Central Reinsurance Corp | EnTie Commercial vs. Huaku Development Co | EnTie Commercial vs. Chailease Holding Co | EnTie Commercial vs. CTBC Financial Holding |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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