Correlation Between ED Invest and New Tech
Can any of the company-specific risk be diversified away by investing in both ED Invest and New Tech 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 ED Invest and New Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ED Invest SA and New Tech Venture, you can compare the effects of market volatilities on ED Invest and New Tech 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 ED Invest with a short position of New Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ED Invest and New Tech.
Diversification Opportunities for ED Invest and New Tech
Very good diversification
The 3 months correlation between EDI and New is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ED Invest SA and New Tech Venture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Tech Venture and ED Invest 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 ED Invest SA are associated (or correlated) with New Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Tech Venture has no effect on the direction of ED Invest i.e., ED Invest and New Tech go up and down completely randomly.
Pair Corralation between ED Invest and New Tech
Assuming the 90 days trading horizon ED Invest SA is expected to generate 0.71 times more return on investment than New Tech. However, ED Invest SA is 1.41 times less risky than New Tech. It trades about -0.04 of its potential returns per unit of risk. New Tech Venture is currently generating about -0.13 per unit of risk. If you would invest 564.00 in ED Invest SA on September 12, 2024 and sell it today you would lose (14.00) from holding ED Invest SA or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
ED Invest SA vs. New Tech Venture
Performance |
| Timeline |
| ED Invest SA |
| New Tech Venture |
ED Invest and New Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ED Invest and New Tech
The main advantage of trading using opposite ED Invest and New Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ED Invest position performs unexpectedly, New Tech 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 New Tech will offset losses from the drop in New Tech's long position.| ED Invest vs. Logintrade SA | ED Invest vs. PZ Cormay SA | ED Invest vs. mBank SA | ED Invest vs. Road Studio SA |
| New Tech vs. ING Bank lski | New Tech vs. Quantum Software SA | New Tech vs. SOFTWARE MANSION SPOLKA | New Tech vs. PMPG Polskie Media |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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