Correlation Between Dynapack International and Edimax Technology
Can any of the company-specific risk be diversified away by investing in both Dynapack International and Edimax 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 Dynapack International and Edimax Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynapack International Technology and Edimax Technology Co, you can compare the effects of market volatilities on Dynapack International and Edimax 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 Dynapack International with a short position of Edimax Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynapack International and Edimax Technology.
Diversification Opportunities for Dynapack International and Edimax Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dynapack and Edimax is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dynapack International Technol and Edimax Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edimax Technology and Dynapack International 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 Dynapack International Technology are associated (or correlated) with Edimax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edimax Technology has no effect on the direction of Dynapack International i.e., Dynapack International and Edimax Technology go up and down completely randomly.
Pair Corralation between Dynapack International and Edimax Technology
Assuming the 90 days trading horizon Dynapack International Technology is expected to generate 2.02 times more return on investment than Edimax Technology. However, Dynapack International is 2.02 times more volatile than Edimax Technology Co. It trades about 0.63 of its potential returns per unit of risk. Edimax Technology Co is currently generating about -0.19 per unit of risk. If you would invest 10,700 in Dynapack International Technology on September 2, 2024 and sell it today you would earn a total of 9,100 from holding Dynapack International Technology or generate 85.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynapack International Technol vs. Edimax Technology Co
Performance |
| Timeline |
| Dynapack International |
| Edimax Technology |
Dynapack International and Edimax Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynapack International and Edimax Technology
The main advantage of trading using opposite Dynapack International and Edimax Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynapack International position performs unexpectedly, Edimax 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 Edimax Technology will offset losses from the drop in Edimax Technology's long position.| Dynapack International vs. Walsin Lihwa Corp | Dynapack International vs. Voltronic Power Technology | Dynapack International vs. Advanced Energy Solution | Dynapack International vs. Simplo Technology Co |
| Edimax Technology vs. CyberTAN Technology | Edimax Technology vs. HannsTouch Solution | Edimax Technology vs. Alpha Networks | Edimax Technology vs. Billion Electric Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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