Correlation Between EMemory Technology and FineMat Applied
Can any of the company-specific risk be diversified away by investing in both EMemory Technology and FineMat Applied 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 FineMat Applied into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMemory Technology and FineMat Applied Materials, you can compare the effects of market volatilities on EMemory Technology and FineMat Applied 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 FineMat Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMemory Technology and FineMat Applied.
Diversification Opportunities for EMemory Technology and FineMat Applied
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EMemory and FineMat is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding eMemory Technology and FineMat Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMat Applied Materials 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 FineMat Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMat Applied Materials has no effect on the direction of EMemory Technology i.e., EMemory Technology and FineMat Applied go up and down completely randomly.
Pair Corralation between EMemory Technology and FineMat Applied
Assuming the 90 days trading horizon eMemory Technology is expected to generate 1.13 times more return on investment than FineMat Applied. However, EMemory Technology is 1.13 times more volatile than FineMat Applied Materials. It trades about 0.06 of its potential returns per unit of risk. FineMat Applied Materials is currently generating about 0.03 per unit of risk. If you would invest 145,550 in eMemory Technology on August 26, 2024 and sell it today you would earn a total of 154,450 from holding eMemory Technology or generate 106.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
eMemory Technology vs. FineMat Applied Materials
Performance |
| Timeline |
| eMemory Technology |
| FineMat Applied Materials |
EMemory Technology and FineMat Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMemory Technology and FineMat Applied
The main advantage of trading using opposite EMemory Technology and FineMat Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMemory Technology position performs unexpectedly, FineMat Applied 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 FineMat Applied will offset losses from the drop in FineMat Applied's long position.| EMemory Technology vs. Global Unichip Corp | EMemory Technology vs. Asmedia Technology | EMemory Technology vs. Unimicron Technology Corp | EMemory Technology vs. Novatek Microelectronics Corp |
| FineMat Applied vs. Advantech Co | FineMat Applied vs. IEI Integration Corp | FineMat Applied vs. Flytech Technology Co | FineMat Applied vs. ADLINK Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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