Correlation Between ECHO INVESTMENT and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both ECHO INVESTMENT and COFCO Joycome 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 ECHO INVESTMENT and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECHO INVESTMENT ZY and COFCO Joycome Foods, you can compare the effects of market volatilities on ECHO INVESTMENT and COFCO Joycome 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 ECHO INVESTMENT with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECHO INVESTMENT and COFCO Joycome.
Diversification Opportunities for ECHO INVESTMENT and COFCO Joycome
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECHO and COFCO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ECHO INVESTMENT ZY and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and ECHO INVESTMENT 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 ECHO INVESTMENT ZY are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of ECHO INVESTMENT i.e., ECHO INVESTMENT and COFCO Joycome go up and down completely randomly.
Pair Corralation between ECHO INVESTMENT and COFCO Joycome
Assuming the 90 days horizon ECHO INVESTMENT ZY is expected to under-perform the COFCO Joycome. But the stock apears to be less risky and, when comparing its historical volatility, ECHO INVESTMENT ZY is 2.94 times less risky than COFCO Joycome. The stock trades about -0.12 of its potential returns per unit of risk. The COFCO Joycome Foods is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 19.00 in COFCO Joycome Foods on September 12, 2024 and sell it today you would lose (1.00) from holding COFCO Joycome Foods or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECHO INVESTMENT ZY vs. COFCO Joycome Foods
Performance |
| Timeline |
| ECHO INVESTMENT ZY |
| COFCO Joycome Foods |
ECHO INVESTMENT and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECHO INVESTMENT and COFCO Joycome
The main advantage of trading using opposite ECHO INVESTMENT and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECHO INVESTMENT position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| ECHO INVESTMENT vs. OPEN HOUSE GROUP | ECHO INVESTMENT vs. Superior Plus Corp | ECHO INVESTMENT vs. SIVERS SEMICONDUCTORS AB | ECHO INVESTMENT vs. CHINA HUARONG ENERHD 50 |
| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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