Correlation Between Erayak Power and Israel Acquisitions
Can any of the company-specific risk be diversified away by investing in both Erayak Power and Israel Acquisitions 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 Erayak Power and Israel Acquisitions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erayak Power Solution and Israel Acquisitions Corp, you can compare the effects of market volatilities on Erayak Power and Israel Acquisitions 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 Erayak Power with a short position of Israel Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erayak Power and Israel Acquisitions.
Diversification Opportunities for Erayak Power and Israel Acquisitions
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Erayak and Israel is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Erayak Power Solution and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp and Erayak Power 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 Erayak Power Solution are associated (or correlated) with Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Erayak Power i.e., Erayak Power and Israel Acquisitions go up and down completely randomly.
Pair Corralation between Erayak Power and Israel Acquisitions
Given the investment horizon of 90 days Erayak Power Solution is expected to generate 7.86 times more return on investment than Israel Acquisitions. However, Erayak Power is 7.86 times more volatile than Israel Acquisitions Corp. It trades about 0.02 of its potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.05 per unit of risk. If you would invest 220.00 in Erayak Power Solution on September 2, 2024 and sell it today you would lose (101.00) from holding Erayak Power Solution or give up 45.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erayak Power Solution vs. Israel Acquisitions Corp
Performance |
| Timeline |
| Erayak Power Solution |
| Israel Acquisitions Corp |
Erayak Power and Israel Acquisitions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erayak Power and Israel Acquisitions
The main advantage of trading using opposite Erayak Power and Israel Acquisitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erayak Power position performs unexpectedly, Israel Acquisitions 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 Israel Acquisitions will offset losses from the drop in Israel Acquisitions' long position.| Erayak Power vs. NeoVolta Common Stock | Erayak Power vs. Hayward Holdings | Erayak Power vs. Advanced Energy Industries | Erayak Power vs. Espey Mfg Electronics |
| Israel Acquisitions vs. Western Asset Investment | Israel Acquisitions vs. Montauk Renewables | Israel Acquisitions vs. SEI Investments | Israel Acquisitions vs. Bridgford Foods |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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