Correlation Between Provision Information and E Lead
Can any of the company-specific risk be diversified away by investing in both Provision Information and E Lead 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 Provision Information and E Lead into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provision Information CoLtd and E Lead Electronic Co, you can compare the effects of market volatilities on Provision Information and E Lead 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 Provision Information with a short position of E Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provision Information and E Lead.
Diversification Opportunities for Provision Information and E Lead
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Provision and 2497 is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Provision Information CoLtd and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic and Provision Information 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 Provision Information CoLtd are associated (or correlated) with E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of Provision Information i.e., Provision Information and E Lead go up and down completely randomly.
Pair Corralation between Provision Information and E Lead
Assuming the 90 days trading horizon Provision Information CoLtd is expected to under-perform the E Lead. But the stock apears to be less risky and, when comparing its historical volatility, Provision Information CoLtd is 1.86 times less risky than E Lead. The stock trades about -0.07 of its potential returns per unit of risk. The E Lead Electronic Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,900 in E Lead Electronic Co on September 1, 2024 and sell it today you would earn a total of 550.00 from holding E Lead Electronic Co or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Provision Information CoLtd vs. E Lead Electronic Co
Performance |
| Timeline |
| Provision Information |
| E Lead Electronic |
Provision Information and E Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provision Information and E Lead
The main advantage of trading using opposite Provision Information and E Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provision Information position performs unexpectedly, E Lead 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 E Lead will offset losses from the drop in E Lead's long position.| Provision Information vs. International CSRC Investment | Provision Information vs. Mercuries Data Systems | Provision Information vs. Quanta Storage | Provision Information vs. Est Global Apparel |
| E Lead vs. Chaintech Technology Corp | E Lead vs. AVerMedia Technologies | E Lead vs. Avision | E Lead vs. Clevo Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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