Correlation Between E Ink and Newmax Technology
Can any of the company-specific risk be diversified away by investing in both E Ink and Newmax Technology 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 E Ink and Newmax Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Ink Holdings and Newmax Technology Co, you can compare the effects of market volatilities on E Ink and Newmax Technology 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 E Ink with a short position of Newmax Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Ink and Newmax Technology.
Diversification Opportunities for E Ink and Newmax Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 8069 and Newmax is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding E Ink Holdings and Newmax Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmax Technology and E Ink 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 E Ink Holdings are associated (or correlated) with Newmax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmax Technology has no effect on the direction of E Ink i.e., E Ink and Newmax Technology go up and down completely randomly.
Pair Corralation between E Ink and Newmax Technology
Assuming the 90 days trading horizon E Ink Holdings is expected to generate 1.4 times more return on investment than Newmax Technology. However, E Ink is 1.4 times more volatile than Newmax Technology Co. It trades about 0.07 of its potential returns per unit of risk. Newmax Technology Co is currently generating about -0.07 per unit of risk. If you would invest 17,376 in E Ink Holdings on September 14, 2024 and sell it today you would earn a total of 8,274 from holding E Ink Holdings or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
E Ink Holdings vs. Newmax Technology Co
Performance |
| Timeline |
| E Ink Holdings |
| Newmax Technology |
E Ink and Newmax Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Ink and Newmax Technology
The main advantage of trading using opposite E Ink and Newmax Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Ink position performs unexpectedly, Newmax Technology 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 Newmax Technology will offset losses from the drop in Newmax Technology's long position.| E Ink vs. Unimicron Technology Corp | E Ink vs. Innolux Corp | E Ink vs. Delta Electronics | E Ink vs. Novatek Microelectronics Corp |
| Newmax Technology vs. Genius Electronic Optical | Newmax Technology vs. Asia Optical Co | Newmax Technology vs. LARGAN Precision Co | Newmax Technology vs. Sino American Silicon Products |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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