Correlation Between EMemory Technology and Niching Industrial
Can any of the company-specific risk be diversified away by investing in both EMemory Technology and Niching Industrial 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 Niching Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMemory Technology and Niching Industrial, you can compare the effects of market volatilities on EMemory Technology and Niching Industrial 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 Niching Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMemory Technology and Niching Industrial.
Diversification Opportunities for EMemory Technology and Niching Industrial
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EMemory and Niching is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology and Niching Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niching Industrial 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 Niching Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niching Industrial has no effect on the direction of EMemory Technology i.e., EMemory Technology and Niching Industrial go up and down completely randomly.
Pair Corralation between EMemory Technology and Niching Industrial
Assuming the 90 days trading horizon eMemory Technology is expected to generate 1.35 times more return on investment than Niching Industrial. However, EMemory Technology is 1.35 times more volatile than Niching Industrial. It trades about 0.05 of its potential returns per unit of risk. Niching Industrial is currently generating about 0.01 per unit of risk. If you would invest 206,578 in eMemory Technology on September 12, 2024 and sell it today you would earn a total of 107,422 from holding eMemory Technology or generate 52.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMemory Technology vs. Niching Industrial
Performance |
| Timeline |
| eMemory Technology |
| Niching Industrial |
EMemory Technology and Niching Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMemory Technology and Niching Industrial
The main advantage of trading using opposite EMemory Technology and Niching Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMemory Technology position performs unexpectedly, Niching Industrial 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 Niching Industrial will offset losses from the drop in Niching Industrial's long position.| EMemory Technology vs. WIN Semiconductors | EMemory Technology vs. GlobalWafers Co | EMemory Technology vs. Novatek Microelectronics Corp | EMemory Technology vs. Ruentex Development Co |
| Niching Industrial vs. Dimension Computer Technology | Niching Industrial vs. Kworld Computer Co | Niching Industrial vs. Ruentex Development Co | Niching Industrial vs. Symtek Automation Asia |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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