Correlation Between Ablerex Electronics and ESUN Financial
Can any of the company-specific risk be diversified away by investing in both Ablerex Electronics and ESUN Financial 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 Ablerex Electronics and ESUN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ablerex Electronics Co and ESUN Financial Holding, you can compare the effects of market volatilities on Ablerex Electronics and ESUN Financial 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 Ablerex Electronics with a short position of ESUN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ablerex Electronics and ESUN Financial.
Diversification Opportunities for Ablerex Electronics and ESUN Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ablerex and ESUN is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ablerex Electronics Co and ESUN Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESUN Financial Holding and Ablerex Electronics 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 Ablerex Electronics Co are associated (or correlated) with ESUN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESUN Financial Holding has no effect on the direction of Ablerex Electronics i.e., Ablerex Electronics and ESUN Financial go up and down completely randomly.
Pair Corralation between Ablerex Electronics and ESUN Financial
Assuming the 90 days trading horizon Ablerex Electronics Co is expected to generate 3.93 times more return on investment than ESUN Financial. However, Ablerex Electronics is 3.93 times more volatile than ESUN Financial Holding. It trades about 0.19 of its potential returns per unit of risk. ESUN Financial Holding is currently generating about -0.01 per unit of risk. If you would invest 4,115 in Ablerex Electronics Co on August 31, 2024 and sell it today you would earn a total of 620.00 from holding Ablerex Electronics Co or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ablerex Electronics Co vs. ESUN Financial Holding
Performance |
| Timeline |
| Ablerex Electronics |
| ESUN Financial Holding |
Ablerex Electronics and ESUN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ablerex Electronics and ESUN Financial
The main advantage of trading using opposite Ablerex Electronics and ESUN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ablerex Electronics position performs unexpectedly, ESUN Financial 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 ESUN Financial will offset losses from the drop in ESUN Financial's long position.| Ablerex Electronics vs. Huang Hsiang Construction | Ablerex Electronics vs. Highwealth Construction Corp | Ablerex Electronics vs. Kindom Construction Corp | Ablerex Electronics vs. Hung Sheng Construction |
| ESUN Financial vs. Central Reinsurance Corp | ESUN Financial vs. Huaku Development Co | ESUN Financial vs. Fubon Financial Holding | ESUN Financial vs. CTBC Financial Holding |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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