Correlation Between ESUN Financial and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both ESUN Financial and Posiflex Technology 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 Posiflex Technology 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 Posiflex Technology, you can compare the effects of market volatilities on ESUN Financial and Posiflex Technology 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 Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESUN Financial and Posiflex Technology.
Diversification Opportunities for ESUN Financial and Posiflex Technology
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ESUN and Posiflex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ESUN Financial Holding and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex 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 Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of ESUN Financial i.e., ESUN Financial and Posiflex Technology go up and down completely randomly.
Pair Corralation between ESUN Financial and Posiflex Technology
Assuming the 90 days trading horizon ESUN Financial Holding is expected to under-perform the Posiflex Technology. But the stock apears to be less risky and, when comparing its historical volatility, ESUN Financial Holding is 2.64 times less risky than Posiflex Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Posiflex Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 13,650 in Posiflex Technology on September 2, 2024 and sell it today you would earn a total of 17,400 from holding Posiflex Technology or generate 127.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESUN Financial Holding vs. Posiflex Technology
Performance |
| Timeline |
| ESUN Financial Holding |
| Posiflex Technology |
ESUN Financial and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESUN Financial and Posiflex Technology
The main advantage of trading using opposite ESUN Financial and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESUN Financial position performs unexpectedly, Posiflex Technology 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 Posiflex Technology will offset losses from the drop in Posiflex Technology's long position.| ESUN Financial vs. Mega Financial Holding | ESUN Financial vs. CTBC Financial Holding | ESUN Financial vs. First Financial Holding | ESUN Financial vs. Fubon 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |