Correlation Between Est Global and Eclat Textile
Can any of the company-specific risk be diversified away by investing in both Est Global and Eclat Textile 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 Est Global and Eclat Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Est Global Apparel and Eclat Textile Co, you can compare the effects of market volatilities on Est Global and Eclat Textile 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 Est Global with a short position of Eclat Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Eclat Textile.
Diversification Opportunities for Est Global and Eclat Textile
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Est and Eclat is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Eclat Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclat Textile and Est Global 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 Est Global Apparel are associated (or correlated) with Eclat Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclat Textile has no effect on the direction of Est Global i.e., Est Global and Eclat Textile go up and down completely randomly.
Pair Corralation between Est Global and Eclat Textile
Assuming the 90 days trading horizon Est Global Apparel is expected to under-perform the Eclat Textile. In addition to that, Est Global is 1.44 times more volatile than Eclat Textile Co. It trades about -0.01 of its total potential returns per unit of risk. Eclat Textile Co is currently generating about 0.02 per unit of volatility. If you would invest 54,300 in Eclat Textile Co on August 28, 2024 and sell it today you would earn a total of 300.00 from holding Eclat Textile Co or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Est Global Apparel vs. Eclat Textile Co
Performance |
| Timeline |
| Est Global Apparel |
| Eclat Textile |
Est Global and Eclat Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Est Global and Eclat Textile
The main advantage of trading using opposite Est Global and Eclat Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Est Global position performs unexpectedly, Eclat Textile 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 Eclat Textile will offset losses from the drop in Eclat Textile's long position.| Est Global vs. Eclat Textile Co | Est Global vs. Ruentex Industries | Est Global vs. Tainan Spinning Co | Est Global vs. Shinkong Synthetic Fiber |
| Eclat Textile vs. Taiwan Semiconductor Manufacturing | Eclat Textile vs. Hon Hai Precision | Eclat Textile vs. MediaTek | Eclat Textile vs. Chunghwa Telecom Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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