Correlation Between EMemory Technology and S Tech
Can any of the company-specific risk be diversified away by investing in both EMemory Technology and S 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 EMemory Technology and S Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMemory Technology and S Tech Corp, you can compare the effects of market volatilities on EMemory Technology and S 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 EMemory Technology with a short position of S Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMemory Technology and S Tech.
Diversification Opportunities for EMemory Technology and S Tech
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMemory and 1584 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology and S Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Tech Corp and EMemory 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 eMemory Technology are associated (or correlated) with S Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Tech Corp has no effect on the direction of EMemory Technology i.e., EMemory Technology and S Tech go up and down completely randomly.
Pair Corralation between EMemory Technology and S Tech
Assuming the 90 days trading horizon eMemory Technology is expected to under-perform the S Tech. In addition to that, EMemory Technology is 2.87 times more volatile than S Tech Corp. It trades about -0.08 of its total potential returns per unit of risk. S Tech Corp is currently generating about -0.12 per unit of volatility. If you would invest 3,305 in S Tech Corp on August 29, 2024 and sell it today you would lose (95.00) from holding S Tech Corp or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMemory Technology vs. S Tech Corp
Performance |
| Timeline |
| eMemory Technology |
| S Tech Corp |
EMemory Technology and S Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMemory Technology and S Tech
The main advantage of trading using opposite EMemory Technology and S Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMemory Technology position performs unexpectedly, S 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 S Tech will offset losses from the drop in S Tech's long position.| EMemory Technology vs. Nan Ya Printed | EMemory Technology vs. Global Unichip Corp | EMemory Technology vs. Aspeed Technology | EMemory Technology vs. Alchip Technologies |
| S Tech vs. Catcher Technology Co | S Tech vs. Solar Applied Materials | S Tech vs. Evergreen Steel Corp | S Tech vs. Shin Zu Shing |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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