Correlation Between Cheng Mei and Emerging Display
Can any of the company-specific risk be diversified away by investing in both Cheng Mei and Emerging Display 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 Cheng Mei and Emerging Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheng Mei Materials and Emerging Display Technologies, you can compare the effects of market volatilities on Cheng Mei and Emerging Display 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 Cheng Mei with a short position of Emerging Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheng Mei and Emerging Display.
Diversification Opportunities for Cheng Mei and Emerging Display
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheng and Emerging is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cheng Mei Materials and Emerging Display Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Display Tec and Cheng Mei 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 Cheng Mei Materials are associated (or correlated) with Emerging Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Display Tec has no effect on the direction of Cheng Mei i.e., Cheng Mei and Emerging Display go up and down completely randomly.
Pair Corralation between Cheng Mei and Emerging Display
Assuming the 90 days trading horizon Cheng Mei is expected to generate 1.94 times less return on investment than Emerging Display. But when comparing it to its historical volatility, Cheng Mei Materials is 2.58 times less risky than Emerging Display. It trades about 0.07 of its potential returns per unit of risk. Emerging Display Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Emerging Display Technologies on October 14, 2024 and sell it today you would earn a total of 50.00 from holding Emerging Display Technologies or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheng Mei Materials vs. Emerging Display Technologies
Performance |
| Timeline |
| Cheng Mei Materials |
| Emerging Display Tec |
Cheng Mei and Emerging Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheng Mei and Emerging Display
The main advantage of trading using opposite Cheng Mei and Emerging Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheng Mei position performs unexpectedly, Emerging Display 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 Emerging Display will offset losses from the drop in Emerging Display's long position.| Cheng Mei vs. Healthconn Corp | Cheng Mei vs. GeneReach Biotechnology | Cheng Mei vs. TWOWAY Communications | Cheng Mei vs. Sunmax Biotechnology Co |
| Emerging Display vs. Gloria Material Technology | Emerging Display vs. GeneReach Biotechnology | Emerging Display vs. Cheng Mei Materials | Emerging Display vs. Solar Applied Materials |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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