Correlation Between Edimax Technology and ITE Tech
Can any of the company-specific risk be diversified away by investing in both Edimax Technology and ITE Tech 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 Edimax Technology and ITE Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edimax Technology Co and ITE Tech, you can compare the effects of market volatilities on Edimax Technology and ITE Tech 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 Edimax Technology with a short position of ITE Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edimax Technology and ITE Tech.
Diversification Opportunities for Edimax Technology and ITE Tech
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edimax and ITE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Edimax Technology Co and ITE Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITE Tech and Edimax Technology 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 Edimax Technology Co are associated (or correlated) with ITE Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITE Tech has no effect on the direction of Edimax Technology i.e., Edimax Technology and ITE Tech go up and down completely randomly.
Pair Corralation between Edimax Technology and ITE Tech
Assuming the 90 days trading horizon Edimax Technology Co is expected to under-perform the ITE Tech. In addition to that, Edimax Technology is 1.05 times more volatile than ITE Tech. It trades about -0.12 of its total potential returns per unit of risk. ITE Tech is currently generating about 0.0 per unit of volatility. If you would invest 14,100 in ITE Tech on August 30, 2024 and sell it today you would lose (200.00) from holding ITE Tech or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edimax Technology Co vs. ITE Tech
Performance |
| Timeline |
| Edimax Technology |
| ITE Tech |
Edimax Technology and ITE Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edimax Technology and ITE Tech
The main advantage of trading using opposite Edimax Technology and ITE Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edimax Technology position performs unexpectedly, ITE Tech 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 ITE Tech will offset losses from the drop in ITE Tech's long position.| Edimax Technology vs. CyberTAN Technology | Edimax Technology vs. HannsTouch Solution | Edimax Technology vs. Alpha Networks | Edimax Technology vs. Billion Electric Co |
| ITE Tech vs. Novatek Microelectronics Corp | ITE Tech vs. Elan Microelectronics Corp | ITE Tech vs. Elite Semiconductor Memory | ITE Tech vs. Faraday Technology Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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