Correlation Between ESUN Financial and V Tac
Can any of the company-specific risk be diversified away by investing in both ESUN Financial and V Tac 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 ESUN Financial and V Tac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESUN Financial Holding and V Tac Technology Co, you can compare the effects of market volatilities on ESUN Financial and V Tac 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 ESUN Financial with a short position of V Tac. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and V Tac.
Diversification Opportunities for ESUN Financial and V Tac
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ESUN and 6229 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and V Tac Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Tac Technology and ESUN Financial 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 ESUN Financial Holding are associated (or correlated) with V Tac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Tac Technology has no effect on the direction of ESUN Financial i.e., ESUN Financial and V Tac go up and down completely randomly.
Pair Corralation between ESUN Financial and V Tac
Assuming the 90 days trading horizon ESUN Financial Holding is expected to generate 0.45 times more return on investment than V Tac. However, ESUN Financial Holding is 2.21 times less risky than V Tac. It trades about -0.01 of its potential returns per unit of risk. V Tac Technology Co is currently generating about -0.39 per unit of risk. If you would invest 2,740 in ESUN Financial Holding on August 31, 2024 and sell it today you would lose (10.00) from holding ESUN Financial Holding or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESUN Financial Holding vs. V Tac Technology Co
Performance |
| Timeline |
| ESUN Financial Holding |
| V Tac Technology |
ESUN Financial and V Tac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and V Tac
The main advantage of trading using opposite ESUN Financial and V Tac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial position performs unexpectedly, V Tac 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 V Tac will offset losses from the drop in V Tac's long position.| ESUN Financial vs. Central Reinsurance Corp | ESUN Financial vs. Huaku Development Co | ESUN Financial vs. Fubon Financial Holding | ESUN Financial vs. Chailease Holding Co |
| V Tac vs. Gamania Digital Entertainment | V Tac vs. Eagle Cold Storage | V Tac vs. C Media Electronics | V Tac vs. Provision Information CoLtd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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