Correlation Between Ever Clear and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both Ever Clear and Tehmag Foods 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 Ever Clear and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Clear Environmental Eng and Tehmag Foods, you can compare the effects of market volatilities on Ever Clear and Tehmag Foods 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 Ever Clear with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Clear and Tehmag Foods.
Diversification Opportunities for Ever Clear and Tehmag Foods
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ever and Tehmag is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ever Clear Environmental Eng and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and Ever Clear 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 Ever Clear Environmental Eng are associated (or correlated) with Tehmag Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tehmag Foods has no effect on the direction of Ever Clear i.e., Ever Clear and Tehmag Foods go up and down completely randomly.
Pair Corralation between Ever Clear and Tehmag Foods
Assuming the 90 days trading horizon Ever Clear Environmental Eng is expected to under-perform the Tehmag Foods. In addition to that, Ever Clear is 1.24 times more volatile than Tehmag Foods. It trades about -0.22 of its total potential returns per unit of risk. Tehmag Foods is currently generating about -0.09 per unit of volatility. If you would invest 30,600 in Tehmag Foods on September 1, 2024 and sell it today you would lose (250.00) from holding Tehmag Foods or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ever Clear Environmental Eng vs. Tehmag Foods
Performance |
| Timeline |
| Ever Clear Environme |
| Tehmag Foods |
Ever Clear and Tehmag Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Clear and Tehmag Foods
The main advantage of trading using opposite Ever Clear and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Clear position performs unexpectedly, Tehmag Foods 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 Tehmag Foods will offset losses from the drop in Tehmag Foods' long position.| Ever Clear vs. Hi Lai Foods Co | Ever Clear vs. Namchow Chemical Industrial | Ever Clear vs. Jinan Acetate Chemical | Ever Clear vs. Hunya Foods Co |
| Tehmag Foods vs. Yuanta Financial Holdings | Tehmag Foods vs. Fubon Financial Holding | Tehmag Foods vs. CHINA DEVELOPMENT FINANCIAL | Tehmag Foods vs. Advanced Wireless Semiconductor |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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