Correlation Between Everdisplay Optronics and CareRay Digital
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By analyzing existing cross correlation between Everdisplay Optronics Shanghai and CareRay Digital Medical, you can compare the effects of market volatilities on Everdisplay Optronics and CareRay Digital 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 Everdisplay Optronics with a short position of CareRay Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everdisplay Optronics and CareRay Digital.
Diversification Opportunities for Everdisplay Optronics and CareRay Digital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Everdisplay and CareRay is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Everdisplay Optronics Shanghai and CareRay Digital Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareRay Digital Medical and Everdisplay Optronics 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 Everdisplay Optronics Shanghai are associated (or correlated) with CareRay Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareRay Digital Medical has no effect on the direction of Everdisplay Optronics i.e., Everdisplay Optronics and CareRay Digital go up and down completely randomly.
Pair Corralation between Everdisplay Optronics and CareRay Digital
Assuming the 90 days trading horizon Everdisplay Optronics is expected to generate 2.66 times less return on investment than CareRay Digital. But when comparing it to its historical volatility, Everdisplay Optronics Shanghai is 1.18 times less risky than CareRay Digital. It trades about 0.06 of its potential returns per unit of risk. CareRay Digital Medical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,004 in CareRay Digital Medical on October 18, 2024 and sell it today you would earn a total of 366.00 from holding CareRay Digital Medical or generate 36.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everdisplay Optronics Shanghai vs. CareRay Digital Medical
Performance |
| Timeline |
| Everdisplay Optronics |
| CareRay Digital Medical |
Everdisplay Optronics and CareRay Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everdisplay Optronics and CareRay Digital
The main advantage of trading using opposite Everdisplay Optronics and CareRay Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everdisplay Optronics position performs unexpectedly, CareRay Digital 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 CareRay Digital will offset losses from the drop in CareRay Digital's long position.The idea behind Everdisplay Optronics Shanghai and CareRay Digital Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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