Correlation Between Aero Win and Eva Airways
Can any of the company-specific risk be diversified away by investing in both Aero Win and Eva Airways 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 Aero Win and Eva Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aero Win Technology and Eva Airways Corp, you can compare the effects of market volatilities on Aero Win and Eva Airways 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 Aero Win with a short position of Eva Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aero Win and Eva Airways.
Diversification Opportunities for Aero Win and Eva Airways
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aero and Eva is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aero Win Technology and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways Corp and Aero Win 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 Aero Win Technology are associated (or correlated) with Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of Aero Win i.e., Aero Win and Eva Airways go up and down completely randomly.
Pair Corralation between Aero Win and Eva Airways
Assuming the 90 days trading horizon Aero Win Technology is expected to under-perform the Eva Airways. In addition to that, Aero Win is 1.19 times more volatile than Eva Airways Corp. It trades about -0.03 of its total potential returns per unit of risk. Eva Airways Corp is currently generating about 0.08 per unit of volatility. If you would invest 3,205 in Eva Airways Corp on September 4, 2024 and sell it today you would earn a total of 1,145 from holding Eva Airways Corp or generate 35.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aero Win Technology vs. Eva Airways Corp
Performance |
| Timeline |
| Aero Win Technology |
| Eva Airways Corp |
Aero Win and Eva Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aero Win and Eva Airways
The main advantage of trading using opposite Aero Win and Eva Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aero Win position performs unexpectedly, Eva Airways 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 Eva Airways will offset losses from the drop in Eva Airways' long position.| Aero Win vs. Eva Airways Corp | Aero Win vs. Taiwan High Speed | Aero Win vs. China Airlines | Aero Win vs. Formosa Plastics Corp |
| Eva Airways vs. Universal Microelectronics Co | Eva Airways vs. AVerMedia Technologies | Eva Airways vs. Symtek Automation Asia | Eva Airways vs. WiseChip 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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