Correlation Between Echo Investment and HiProMine
Can any of the company-specific risk be diversified away by investing in both Echo Investment and HiProMine 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 Echo Investment and HiProMine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echo Investment SA and HiProMine SA, you can compare the effects of market volatilities on Echo Investment and HiProMine 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 Echo Investment with a short position of HiProMine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and HiProMine.
Diversification Opportunities for Echo Investment and HiProMine
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Echo and HiProMine is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and HiProMine SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HiProMine SA and Echo Investment 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 Echo Investment SA are associated (or correlated) with HiProMine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HiProMine SA has no effect on the direction of Echo Investment i.e., Echo Investment and HiProMine go up and down completely randomly.
Pair Corralation between Echo Investment and HiProMine
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 0.94 times more return on investment than HiProMine. However, Echo Investment SA is 1.07 times less risky than HiProMine. It trades about 0.09 of its potential returns per unit of risk. HiProMine SA is currently generating about -0.02 per unit of risk. If you would invest 425.00 in Echo Investment SA on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Echo Investment SA or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Echo Investment SA vs. HiProMine SA
Performance |
| Timeline |
| Echo Investment SA |
| HiProMine SA |
Echo Investment and HiProMine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and HiProMine
The main advantage of trading using opposite Echo Investment and HiProMine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, HiProMine 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 HiProMine will offset losses from the drop in HiProMine's long position.| Echo Investment vs. Ice Code Games | Echo Investment vs. UF Games SA | Echo Investment vs. Mlk Foods Public | Echo Investment vs. Cloud Technologies SA |
| HiProMine vs. Mlk Foods Public | HiProMine vs. Medicofarma Biotech SA | HiProMine vs. Inter Cars SA | HiProMine vs. Gremi Media SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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