Correlation Between Everland Investment and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both Everland Investment and Tienlen Steel 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 Everland Investment and Tienlen Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everland Investment JSC and Tienlen Steel Corp, you can compare the effects of market volatilities on Everland Investment and Tienlen Steel 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 Everland Investment with a short position of Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everland Investment and Tienlen Steel.
Diversification Opportunities for Everland Investment and Tienlen Steel
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Everland and Tienlen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Everland Investment JSC and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp and Everland 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 Everland Investment JSC are associated (or correlated) with Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of Everland Investment i.e., Everland Investment and Tienlen Steel go up and down completely randomly.
Pair Corralation between Everland Investment and Tienlen Steel
Assuming the 90 days trading horizon Everland Investment JSC is expected to generate 1.88 times more return on investment than Tienlen Steel. However, Everland Investment is 1.88 times more volatile than Tienlen Steel Corp. It trades about -0.02 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.41 per unit of risk. If you would invest 660,000 in Everland Investment JSC on September 2, 2024 and sell it today you would lose (12,000) from holding Everland Investment JSC or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everland Investment JSC vs. Tienlen Steel Corp
Performance |
| Timeline |
| Everland Investment JSC |
| Tienlen Steel Corp |
Everland Investment and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everland Investment and Tienlen Steel
The main advantage of trading using opposite Everland Investment and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everland Investment position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| Everland Investment vs. FIT INVEST JSC | Everland Investment vs. Damsan JSC | Everland Investment vs. An Phat Plastic | Everland Investment vs. Alphanam ME |
| Tienlen Steel vs. FIT INVEST JSC | Tienlen Steel vs. Damsan JSC | Tienlen Steel vs. An Phat Plastic | Tienlen Steel vs. Alphanam ME |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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