Correlation Between Eagle Cold and Coxon Precise
Can any of the company-specific risk be diversified away by investing in both Eagle Cold and Coxon Precise 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 Coxon Precise 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 Coxon Precise Industrial, you can compare the effects of market volatilities on Eagle Cold and Coxon Precise 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 Coxon Precise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Cold and Coxon Precise.
Diversification Opportunities for Eagle Cold and Coxon Precise
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and Coxon is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Cold Storage and Coxon Precise Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coxon Precise Industrial 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 Coxon Precise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coxon Precise Industrial has no effect on the direction of Eagle Cold i.e., Eagle Cold and Coxon Precise go up and down completely randomly.
Pair Corralation between Eagle Cold and Coxon Precise
Assuming the 90 days trading horizon Eagle Cold is expected to generate 1.22 times less return on investment than Coxon Precise. But when comparing it to its historical volatility, Eagle Cold Storage is 1.93 times less risky than Coxon Precise. It trades about 0.07 of its potential returns per unit of risk. Coxon Precise Industrial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,230 in Coxon Precise Industrial on September 3, 2024 and sell it today you would earn a total of 615.00 from holding Coxon Precise Industrial or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Cold Storage vs. Coxon Precise Industrial
Performance |
| Timeline |
| Eagle Cold Storage |
| Coxon Precise Industrial |
Eagle Cold and Coxon Precise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Cold and Coxon Precise
The main advantage of trading using opposite Eagle Cold and Coxon Precise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Cold position performs unexpectedly, Coxon Precise 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 Coxon Precise will offset losses from the drop in Coxon Precise'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 |
| Coxon Precise vs. Taiwan Semiconductor Manufacturing | Coxon Precise vs. Yang Ming Marine | Coxon Precise vs. ASE Industrial Holding | Coxon Precise vs. AU Optronics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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