Correlation Between Eagle Cold and Transcend Information
Can any of the company-specific risk be diversified away by investing in both Eagle Cold and Transcend Information 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 Eagle Cold and Transcend Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Cold Storage and Transcend Information, you can compare the effects of market volatilities on Eagle Cold and Transcend Information 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 Eagle Cold with a short position of Transcend Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Cold and Transcend Information.
Diversification Opportunities for Eagle Cold and Transcend Information
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Transcend is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Cold Storage and Transcend Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcend Information and Eagle Cold 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 Eagle Cold Storage are associated (or correlated) with Transcend Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcend Information has no effect on the direction of Eagle Cold i.e., Eagle Cold and Transcend Information go up and down completely randomly.
Pair Corralation between Eagle Cold and Transcend Information
Assuming the 90 days trading horizon Eagle Cold Storage is expected to generate 0.8 times more return on investment than Transcend Information. However, Eagle Cold Storage is 1.24 times less risky than Transcend Information. It trades about -0.04 of its potential returns per unit of risk. Transcend Information is currently generating about -0.1 per unit of risk. If you would invest 3,090 in Eagle Cold Storage on September 5, 2024 and sell it today you would lose (90.00) from holding Eagle Cold Storage or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Cold Storage vs. Transcend Information
Performance |
| Timeline |
| Eagle Cold Storage |
| Transcend Information |
Eagle Cold and Transcend Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Cold and Transcend Information
The main advantage of trading using opposite Eagle Cold and Transcend Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Cold position performs unexpectedly, Transcend Information 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 Transcend Information will offset losses from the drop in Transcend Information's long position.| Eagle Cold vs. Uni President Enterprises Corp | Eagle Cold vs. Lien Hwa Industrial | Eagle Cold vs. Great Wall Enterprise | Eagle Cold vs. Standard Foods Corp |
| Transcend Information vs. Taiwan Semiconductor Manufacturing | Transcend Information vs. Yang Ming Marine | Transcend Information vs. AU Optronics | Transcend Information vs. Nan Ya Plastics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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