Correlation Between Emerging Display and Global Lighting
Can any of the company-specific risk be diversified away by investing in both Emerging Display and Global Lighting 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 Emerging Display and Global Lighting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Global Lighting Technologies, you can compare the effects of market volatilities on Emerging Display and Global Lighting 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 Emerging Display with a short position of Global Lighting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Global Lighting.
Diversification Opportunities for Emerging Display and Global Lighting
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emerging and Global is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies and Global Lighting Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Lighting Tech and Emerging Display 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 Emerging Display Technologies are associated (or correlated) with Global Lighting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Lighting Tech has no effect on the direction of Emerging Display i.e., Emerging Display and Global Lighting go up and down completely randomly.
Pair Corralation between Emerging Display and Global Lighting
Assuming the 90 days trading horizon Emerging Display Technologies is expected to generate 1.16 times more return on investment than Global Lighting. However, Emerging Display is 1.16 times more volatile than Global Lighting Technologies. It trades about 0.03 of its potential returns per unit of risk. Global Lighting Technologies is currently generating about 0.02 per unit of risk. If you would invest 2,135 in Emerging Display Technologies on September 3, 2024 and sell it today you would earn a total of 555.00 from holding Emerging Display Technologies or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Display Technologies vs. Global Lighting Technologies
Performance |
| Timeline |
| Emerging Display Tec |
| Global Lighting Tech |
Emerging Display and Global Lighting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Global Lighting
The main advantage of trading using opposite Emerging Display and Global Lighting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display position performs unexpectedly, Global Lighting 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 Global Lighting will offset losses from the drop in Global Lighting's long position.| Emerging Display vs. Taiwan Semiconductor Manufacturing | Emerging Display vs. Yang Ming Marine | Emerging Display vs. ASE Industrial Holding | Emerging Display vs. AU Optronics |
| Global Lighting vs. Arcadyan Technology Corp | Global Lighting vs. Zhen Ding Technology | Global Lighting vs. Taiwan Surface Mounting | Global Lighting vs. Flexium Interconnect |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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