Correlation Between Dug Technology and EP Financial
Can any of the company-specific risk be diversified away by investing in both Dug Technology and EP Financial 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 Dug Technology and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dug Technology and EP Financial Group, you can compare the effects of market volatilities on Dug Technology and EP Financial 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 Dug Technology with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dug Technology and EP Financial.
Diversification Opportunities for Dug Technology and EP Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dug and EP1 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dug Technology and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Dug Technology 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 Dug Technology are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Dug Technology i.e., Dug Technology and EP Financial go up and down completely randomly.
Pair Corralation between Dug Technology and EP Financial
Assuming the 90 days trading horizon Dug Technology is expected to generate 0.93 times more return on investment than EP Financial. However, Dug Technology is 1.07 times less risky than EP Financial. It trades about 0.09 of its potential returns per unit of risk. EP Financial Group is currently generating about 0.02 per unit of risk. If you would invest 52.00 in Dug Technology on September 2, 2024 and sell it today you would earn a total of 115.00 from holding Dug Technology or generate 221.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dug Technology vs. EP Financial Group
Performance |
| Timeline |
| Dug Technology |
| EP Financial Group |
Dug Technology and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dug Technology and EP Financial
The main advantage of trading using opposite Dug Technology and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dug Technology position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Dug Technology vs. Aneka Tambang Tbk | Dug Technology vs. Commonwealth Bank | Dug Technology vs. Commonwealth Bank of | Dug Technology vs. Australia and New |
| EP Financial vs. WA1 Resources | EP Financial vs. Predictive Discovery | EP Financial vs. Cooper Metals | EP Financial vs. OD6 Metals |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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