Correlation Between Est Global and Chicony Power
Can any of the company-specific risk be diversified away by investing in both Est Global and Chicony Power 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 Chicony Power 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 Chicony Power Technology, you can compare the effects of market volatilities on Est Global and Chicony Power 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 Chicony Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Est Global and Chicony Power.
Diversification Opportunities for Est Global and Chicony Power
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Est and Chicony is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Chicony Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicony Power Technology 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 Chicony Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicony Power Technology has no effect on the direction of Est Global i.e., Est Global and Chicony Power go up and down completely randomly.
Pair Corralation between Est Global and Chicony Power
Assuming the 90 days trading horizon Est Global Apparel is expected to generate 0.56 times more return on investment than Chicony Power. However, Est Global Apparel is 1.78 times less risky than Chicony Power. It trades about 0.08 of its potential returns per unit of risk. Chicony Power Technology is currently generating about 0.03 per unit of risk. If you would invest 1,695 in Est Global Apparel on November 7, 2024 and sell it today you would earn a total of 20.00 from holding Est Global Apparel or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Est Global Apparel vs. Chicony Power Technology
Performance |
| Timeline |
| Est Global Apparel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chicony Power Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Est Global and Chicony Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Est Global and Chicony Power
The main advantage of trading using opposite Est Global and Chicony Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Est Global position performs unexpectedly, Chicony Power 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 Chicony Power will offset losses from the drop in Chicony Power's long position.The idea behind Est Global Apparel and Chicony Power Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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