Correlation Between Eagle Cold and Quanta Storage
Can any of the company-specific risk be diversified away by investing in both Eagle Cold and Quanta Storage 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 Quanta Storage 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 Quanta Storage, you can compare the effects of market volatilities on Eagle Cold and Quanta Storage 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 Quanta Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Cold and Quanta Storage.
Diversification Opportunities for Eagle Cold and Quanta Storage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eagle and Quanta is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Cold Storage and Quanta Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanta Storage 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 Quanta Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanta Storage has no effect on the direction of Eagle Cold i.e., Eagle Cold and Quanta Storage go up and down completely randomly.
Pair Corralation between Eagle Cold and Quanta Storage
Assuming the 90 days trading horizon Eagle Cold is expected to generate 2.54 times less return on investment than Quanta Storage. But when comparing it to its historical volatility, Eagle Cold Storage is 2.49 times less risky than Quanta Storage. It trades about 0.07 of its potential returns per unit of risk. Quanta Storage is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,943 in Quanta Storage on September 3, 2024 and sell it today you would earn a total of 5,757 from holding Quanta Storage or generate 146.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Cold Storage vs. Quanta Storage
Performance |
| Timeline |
| Eagle Cold Storage |
| Quanta Storage |
Eagle Cold and Quanta Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Cold and Quanta Storage
The main advantage of trading using opposite Eagle Cold and Quanta Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Cold position performs unexpectedly, Quanta Storage 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 Quanta Storage will offset losses from the drop in Quanta Storage'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 |
| Quanta Storage vs. Quanta Computer | Quanta Storage vs. Elitegroup Computer Systems | Quanta Storage vs. WiseChip Semiconductor | Quanta Storage vs. Novatek Microelectronics Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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