Correlation Between Eastern Technical and Sabuy Technology
Can any of the company-specific risk be diversified away by investing in both Eastern Technical and Sabuy Technology 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 Eastern Technical and Sabuy Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Technical Engineering and Sabuy Technology Public, you can compare the effects of market volatilities on Eastern Technical and Sabuy Technology 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 Eastern Technical with a short position of Sabuy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Technical and Sabuy Technology.
Diversification Opportunities for Eastern Technical and Sabuy Technology
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastern and Sabuy is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Technical Engineering and Sabuy Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabuy Technology Public and Eastern Technical 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 Eastern Technical Engineering are associated (or correlated) with Sabuy Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabuy Technology Public has no effect on the direction of Eastern Technical i.e., Eastern Technical and Sabuy Technology go up and down completely randomly.
Pair Corralation between Eastern Technical and Sabuy Technology
Assuming the 90 days trading horizon Eastern Technical Engineering is expected to generate 0.38 times more return on investment than Sabuy Technology. However, Eastern Technical Engineering is 2.66 times less risky than Sabuy Technology. It trades about -0.37 of its potential returns per unit of risk. Sabuy Technology Public is currently generating about -0.48 per unit of risk. If you would invest 107.00 in Eastern Technical Engineering on August 29, 2024 and sell it today you would lose (15.00) from holding Eastern Technical Engineering or give up 14.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Technical Engineering vs. Sabuy Technology Public
Performance |
| Timeline |
| Eastern Technical |
| Sabuy Technology Public |
Eastern Technical and Sabuy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Technical and Sabuy Technology
The main advantage of trading using opposite Eastern Technical and Sabuy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Technical position performs unexpectedly, Sabuy Technology 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 Sabuy Technology will offset losses from the drop in Sabuy Technology's long position.| Eastern Technical vs. G Capital Public | Eastern Technical vs. Harn Engineering Solutions | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek Public |
| Sabuy Technology vs. Kulthorn Kirby Public | Sabuy Technology vs. The Erawan Group | Sabuy Technology vs. Airports of Thailand | Sabuy Technology vs. Eastern Technical Engineering |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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