Correlation Between Ebara Corp and Weichai Power
Can any of the company-specific risk be diversified away by investing in both Ebara Corp and Weichai Power 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 Ebara Corp and Weichai Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebara Corp ADR and Weichai Power, you can compare the effects of market volatilities on Ebara Corp and Weichai Power 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 Ebara Corp with a short position of Weichai Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebara Corp and Weichai Power.
Diversification Opportunities for Ebara Corp and Weichai Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ebara and Weichai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ebara Corp ADR and Weichai Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weichai Power and Ebara Corp 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 Ebara Corp ADR are associated (or correlated) with Weichai Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weichai Power has no effect on the direction of Ebara Corp i.e., Ebara Corp and Weichai Power go up and down completely randomly.
Pair Corralation between Ebara Corp and Weichai Power
If you would invest 843.00 in Ebara Corp ADR on November 27, 2024 and sell it today you would earn a total of 17.00 from holding Ebara Corp ADR or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ebara Corp ADR vs. Weichai Power
Performance |
| Timeline |
| Ebara Corp ADR |
| Weichai Power |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Ebara Corp and Weichai Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebara Corp and Weichai Power
The main advantage of trading using opposite Ebara Corp and Weichai Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebara Corp position performs unexpectedly, Weichai Power 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 Weichai Power will offset losses from the drop in Weichai Power's long position.| Ebara Corp vs. Xinjiang Goldwind Science | Ebara Corp vs. Schneider Electric SE | Ebara Corp vs. Vestas Wind Systems |
| Weichai Power vs. Shanghai Electric Group | Weichai Power vs. Xinjiang Goldwind Science | Weichai Power vs. Nordson | Weichai Power vs. CVD Equipment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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