Correlation Between EMemory Technology and Ennostar
Can any of the company-specific risk be diversified away by investing in both EMemory Technology and Ennostar 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 Ennostar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMemory Technology and Ennostar, you can compare the effects of market volatilities on EMemory Technology and Ennostar 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 Ennostar. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMemory Technology and Ennostar.
Diversification Opportunities for EMemory Technology and Ennostar
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMemory and Ennostar is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology and Ennostar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennostar 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 Ennostar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennostar has no effect on the direction of EMemory Technology i.e., EMemory Technology and Ennostar go up and down completely randomly.
Pair Corralation between EMemory Technology and Ennostar
Assuming the 90 days trading horizon eMemory Technology is expected to generate 1.81 times more return on investment than Ennostar. However, EMemory Technology is 1.81 times more volatile than Ennostar. It trades about 0.07 of its potential returns per unit of risk. Ennostar is currently generating about 0.11 per unit of risk. If you would invest 259,000 in eMemory Technology on August 29, 2024 and sell it today you would earn a total of 32,000 from holding eMemory Technology or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMemory Technology vs. Ennostar
Performance |
| Timeline |
| eMemory Technology |
| Ennostar |
EMemory Technology and Ennostar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMemory Technology and Ennostar
The main advantage of trading using opposite EMemory Technology and Ennostar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMemory Technology position performs unexpectedly, Ennostar 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 Ennostar will offset losses from the drop in Ennostar'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 |
| Ennostar vs. Innolux Corp | Ennostar vs. United Renewable Energy | Ennostar vs. Acbel Polytech | Ennostar vs. Gigastorage 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Correlations Find global opportunities by holding instruments from different markets |