Correlation Between Asia Electronic and EirGenix
Can any of the company-specific risk be diversified away by investing in both Asia Electronic and EirGenix 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 Asia Electronic and EirGenix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Electronic Material and EirGenix, you can compare the effects of market volatilities on Asia Electronic and EirGenix 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 Asia Electronic with a short position of EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Electronic and EirGenix.
Diversification Opportunities for Asia Electronic and EirGenix
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asia and EirGenix is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Asia Electronic Material and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix and Asia Electronic 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 Asia Electronic Material are associated (or correlated) with EirGenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EirGenix has no effect on the direction of Asia Electronic i.e., Asia Electronic and EirGenix go up and down completely randomly.
Pair Corralation between Asia Electronic and EirGenix
Assuming the 90 days trading horizon Asia Electronic Material is expected to generate 0.31 times more return on investment than EirGenix. However, Asia Electronic Material is 3.24 times less risky than EirGenix. It trades about -0.02 of its potential returns per unit of risk. EirGenix is currently generating about -0.22 per unit of risk. If you would invest 2,020 in Asia Electronic Material on September 13, 2024 and sell it today you would lose (10.00) from holding Asia Electronic Material or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Electronic Material vs. EirGenix
Performance |
| Timeline |
| Asia Electronic Material |
| EirGenix |
Asia Electronic and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Electronic and EirGenix
The main advantage of trading using opposite Asia Electronic and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Electronic position performs unexpectedly, EirGenix 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 EirGenix will offset losses from the drop in EirGenix's long position.| Asia Electronic vs. ANJI Technology Co | Asia Electronic vs. Emerging Display Technologies | Asia Electronic vs. U Tech Media Corp | Asia Electronic vs. Ruentex Development Co |
| EirGenix vs. Gamania Digital Entertainment | EirGenix vs. GameSparcs Co | EirGenix vs. Dadi Early Childhood Education | EirGenix vs. AVerMedia 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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