Correlation Between Excellence Optoelectronic and EirGenix
Can any of the company-specific risk be diversified away by investing in both Excellence Optoelectronic 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 Excellence Optoelectronic and EirGenix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excellence Optoelectronic and EirGenix, you can compare the effects of market volatilities on Excellence Optoelectronic 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 Excellence Optoelectronic with a short position of EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excellence Optoelectronic and EirGenix.
Diversification Opportunities for Excellence Optoelectronic and EirGenix
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Excellence and EirGenix is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Excellence Optoelectronic and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix and Excellence Optoelectronic 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 Excellence Optoelectronic 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 Excellence Optoelectronic i.e., Excellence Optoelectronic and EirGenix go up and down completely randomly.
Pair Corralation between Excellence Optoelectronic and EirGenix
Assuming the 90 days trading horizon Excellence Optoelectronic is expected to generate 2.06 times more return on investment than EirGenix. However, Excellence Optoelectronic is 2.06 times more volatile than EirGenix. It trades about 0.08 of its potential returns per unit of risk. EirGenix is currently generating about 0.06 per unit of risk. If you would invest 2,625 in Excellence Optoelectronic on August 30, 2024 and sell it today you would earn a total of 370.00 from holding Excellence Optoelectronic or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excellence Optoelectronic vs. EirGenix
Performance |
| Timeline |
| Excellence Optoelectronic |
| EirGenix |
Excellence Optoelectronic and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excellence Optoelectronic and EirGenix
The main advantage of trading using opposite Excellence Optoelectronic and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excellence Optoelectronic 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.| Excellence Optoelectronic vs. Hon Hai Precision | Excellence Optoelectronic vs. Delta Electronics | Excellence Optoelectronic vs. LARGAN Precision Co | Excellence Optoelectronic vs. E Ink Holdings |
| EirGenix vs. Elan Microelectronics Corp | EirGenix vs. Oceanic Beverages Co | EirGenix vs. Ambassador Hotel | EirGenix vs. Chung Lien Transportation |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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