Correlation Between EVS Broadcast and Chongqing Machinery
Can any of the company-specific risk be diversified away by investing in both EVS Broadcast and Chongqing Machinery 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 EVS Broadcast and Chongqing Machinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVS Broadcast Equipment and Chongqing Machinery Electric, you can compare the effects of market volatilities on EVS Broadcast and Chongqing Machinery 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 EVS Broadcast with a short position of Chongqing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVS Broadcast and Chongqing Machinery.
Diversification Opportunities for EVS Broadcast and Chongqing Machinery
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EVS and Chongqing is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding EVS Broadcast Equipment and Chongqing Machinery Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Machinery and EVS Broadcast 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 EVS Broadcast Equipment are associated (or correlated) with Chongqing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Machinery has no effect on the direction of EVS Broadcast i.e., EVS Broadcast and Chongqing Machinery go up and down completely randomly.
Pair Corralation between EVS Broadcast and Chongqing Machinery
Assuming the 90 days trading horizon EVS Broadcast is expected to generate 1.38 times less return on investment than Chongqing Machinery. But when comparing it to its historical volatility, EVS Broadcast Equipment is 1.46 times less risky than Chongqing Machinery. It trades about 0.06 of its potential returns per unit of risk. Chongqing Machinery Electric is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.20 in Chongqing Machinery Electric on September 1, 2024 and sell it today you would earn a total of 0.15 from holding Chongqing Machinery Electric or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVS Broadcast Equipment vs. Chongqing Machinery Electric
Performance |
| Timeline |
| EVS Broadcast Equipment |
| Chongqing Machinery |
EVS Broadcast and Chongqing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVS Broadcast and Chongqing Machinery
The main advantage of trading using opposite EVS Broadcast and Chongqing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVS Broadcast position performs unexpectedly, Chongqing Machinery 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 Chongqing Machinery will offset losses from the drop in Chongqing Machinery's long position.| EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc | EVS Broadcast vs. Apple Inc |
| Chongqing Machinery vs. ABB | Chongqing Machinery vs. Emerson Electric Co | Chongqing Machinery vs. Superior Plus Corp | Chongqing Machinery vs. NMI Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |