Correlation Between ECloudvalley Digital and BES Engineering
Can any of the company-specific risk be diversified away by investing in both ECloudvalley Digital and BES Engineering 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 ECloudvalley Digital and BES Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eCloudvalley Digital Technology and BES Engineering Co, you can compare the effects of market volatilities on ECloudvalley Digital and BES Engineering 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 ECloudvalley Digital with a short position of BES Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECloudvalley Digital and BES Engineering.
Diversification Opportunities for ECloudvalley Digital and BES Engineering
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ECloudvalley and BES is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding eCloudvalley Digital Technolog and BES Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BES Engineering and ECloudvalley Digital 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 eCloudvalley Digital Technology are associated (or correlated) with BES Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BES Engineering has no effect on the direction of ECloudvalley Digital i.e., ECloudvalley Digital and BES Engineering go up and down completely randomly.
Pair Corralation between ECloudvalley Digital and BES Engineering
Assuming the 90 days trading horizon eCloudvalley Digital Technology is expected to under-perform the BES Engineering. In addition to that, ECloudvalley Digital is 1.15 times more volatile than BES Engineering Co. It trades about -0.01 of its total potential returns per unit of risk. BES Engineering Co is currently generating about 0.01 per unit of volatility. If you would invest 1,115 in BES Engineering Co on August 26, 2024 and sell it today you would earn a total of 0.00 from holding BES Engineering Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
eCloudvalley Digital Technolog vs. BES Engineering Co
Performance |
| Timeline |
| eCloudvalley Digital |
| BES Engineering |
ECloudvalley Digital and BES Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECloudvalley Digital and BES Engineering
The main advantage of trading using opposite ECloudvalley Digital and BES Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECloudvalley Digital position performs unexpectedly, BES Engineering 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 BES Engineering will offset losses from the drop in BES Engineering's long position.| ECloudvalley Digital vs. Egis Technology | ECloudvalley Digital vs. Goldsun Building Materials | ECloudvalley Digital vs. HiTi Digital | ECloudvalley Digital vs. YuantaP shares Taiwan Mid Cap |
| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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