Correlation Between Easy Software and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Easy Software and Peijia Medical 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 Easy Software and Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Peijia Medical Limited, you can compare the effects of market volatilities on Easy Software and Peijia Medical 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 Easy Software with a short position of Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Peijia Medical.
Diversification Opportunities for Easy Software and Peijia Medical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Easy and Peijia is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical and Easy Software 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 Easy Software AG are associated (or correlated) with Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Easy Software i.e., Easy Software and Peijia Medical go up and down completely randomly.
Pair Corralation between Easy Software and Peijia Medical
Assuming the 90 days trading horizon Easy Software AG is expected to generate 1.4 times more return on investment than Peijia Medical. However, Easy Software is 1.4 times more volatile than Peijia Medical Limited. It trades about 0.01 of its potential returns per unit of risk. Peijia Medical Limited is currently generating about -0.18 per unit of risk. If you would invest 1,800 in Easy Software AG on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Easy Software AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. Peijia Medical Limited
Performance |
| Timeline |
| Easy Software AG |
| Peijia Medical |
Easy Software and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Peijia Medical
The main advantage of trading using opposite Easy Software and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| Easy Software vs. Suntory Beverage Food | Easy Software vs. Austevoll Seafood ASA | Easy Software vs. ANGANG STEEL H | Easy Software vs. Axfood AB |
| Peijia Medical vs. MINCO SILVER | Peijia Medical vs. Sekisui Chemical Co | Peijia Medical vs. Mitsui Chemicals | Peijia Medical vs. MAG SILVER |
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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