Correlation Between Edimax Technology and Bright Led
Can any of the company-specific risk be diversified away by investing in both Edimax Technology and Bright Led 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 Bright Led 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 Bright Led Electronics, you can compare the effects of market volatilities on Edimax Technology and Bright Led 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 Bright Led. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edimax Technology and Bright Led.
Diversification Opportunities for Edimax Technology and Bright Led
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edimax and Bright is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Edimax Technology Co and Bright Led Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Led Electronics 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 Bright Led. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Led Electronics has no effect on the direction of Edimax Technology i.e., Edimax Technology and Bright Led go up and down completely randomly.
Pair Corralation between Edimax Technology and Bright Led
Assuming the 90 days trading horizon Edimax Technology Co is expected to under-perform the Bright Led. But the stock apears to be less risky and, when comparing its historical volatility, Edimax Technology Co is 1.41 times less risky than Bright Led. The stock trades about -0.12 of its potential returns per unit of risk. The Bright Led Electronics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,110 in Bright Led Electronics on August 30, 2024 and sell it today you would lose (10.00) from holding Bright Led Electronics or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edimax Technology Co vs. Bright Led Electronics
Performance |
| Timeline |
| Edimax Technology |
| Bright Led Electronics |
Edimax Technology and Bright Led Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edimax Technology and Bright Led
The main advantage of trading using opposite Edimax Technology and Bright Led positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edimax Technology position performs unexpectedly, Bright Led 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 Bright Led will offset losses from the drop in Bright Led's long position.| Edimax Technology vs. CyberTAN Technology | Edimax Technology vs. HannsTouch Solution | Edimax Technology vs. Alpha Networks | Edimax Technology vs. Billion Electric Co |
| Bright Led vs. Everlight Electronics Co | Bright Led vs. Harvatek Corp | Bright Led vs. Optotech Corp | Bright Led vs. I Chiun Precision Industry |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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