Correlation Between Est Global and Ardentec
Can any of the company-specific risk be diversified away by investing in both Est Global and Ardentec 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 Ardentec 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 Ardentec, you can compare the effects of market volatilities on Est Global and Ardentec 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 Ardentec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Ardentec.
Diversification Opportunities for Est Global and Ardentec
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Est and Ardentec is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Ardentec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardentec 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 Ardentec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardentec has no effect on the direction of Est Global i.e., Est Global and Ardentec go up and down completely randomly.
Pair Corralation between Est Global and Ardentec
Assuming the 90 days trading horizon Est Global Apparel is expected to generate 1.57 times more return on investment than Ardentec. However, Est Global is 1.57 times more volatile than Ardentec. It trades about 0.01 of its potential returns per unit of risk. Ardentec is currently generating about -0.12 per unit of risk. If you would invest 1,795 in Est Global Apparel on September 3, 2024 and sell it today you would lose (10.00) from holding Est Global Apparel or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Est Global Apparel vs. Ardentec
Performance |
| Timeline |
| Est Global Apparel |
| Ardentec |
Est Global and Ardentec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Est Global and Ardentec
The main advantage of trading using opposite Est Global and Ardentec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Est Global position performs unexpectedly, Ardentec 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 Ardentec will offset losses from the drop in Ardentec's long position.| Est Global vs. Far Eastern New | Est Global vs. Eclat Textile Co | Est Global vs. Ruentex Industries | Est Global vs. Formosa Taffeta Co |
| Ardentec vs. Chung Hsin Electric Machinery | Ardentec vs. China Construction Bank | Ardentec vs. Est Global Apparel | Ardentec vs. Emerging Display Technologies |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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