Correlation Between New Tech and E Shopping
Can any of the company-specific risk be diversified away by investing in both New Tech and E Shopping 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 New Tech and E Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Tech Venture and E shopping Group SA, you can compare the effects of market volatilities on New Tech and E Shopping 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 New Tech with a short position of E Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Tech and E Shopping.
Diversification Opportunities for New Tech and E Shopping
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and ESG is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding New Tech Venture and E shopping Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E shopping Group and New Tech 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 New Tech Venture are associated (or correlated) with E Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E shopping Group has no effect on the direction of New Tech i.e., New Tech and E Shopping go up and down completely randomly.
Pair Corralation between New Tech and E Shopping
Assuming the 90 days trading horizon New Tech Venture is expected to generate 0.54 times more return on investment than E Shopping. However, New Tech Venture is 1.84 times less risky than E Shopping. It trades about 0.01 of its potential returns per unit of risk. E shopping Group SA is currently generating about 0.0 per unit of risk. If you would invest 14.00 in New Tech Venture on November 8, 2024 and sell it today you would lose (3.00) from holding New Tech Venture or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.33% |
| Values | Daily Returns |
New Tech Venture vs. E shopping Group SA
Performance |
| Timeline |
| New Tech Venture |
| E shopping Group |
New Tech and E Shopping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Tech and E Shopping
The main advantage of trading using opposite New Tech and E Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Tech position performs unexpectedly, E Shopping 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 E Shopping will offset losses from the drop in E Shopping's long position.| New Tech vs. TEN SQUARE GAMES | New Tech vs. Centrum Finansowe Banku | New Tech vs. Bank Millennium SA | New Tech vs. True Games Syndicate |
| E Shopping vs. LSI Software SA | E Shopping vs. Ultimate Games SA | E Shopping vs. Drago entertainment SA | E Shopping vs. PLAYWAY 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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