Correlation Between Eagon Industrial and Insung Information

Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and Insung Information 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 Eagon Industrial and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagon Industrial Co and Insung Information Co, you can compare the effects of market volatilities on Eagon Industrial and Insung Information 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 Eagon Industrial with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Insung Information.

Diversification Opportunities for Eagon Industrial and Insung Information

0.5

Correlation Coefficient

Eagon Industrial  Insung Information

Very weak diversification

The 3 months correlation between Eagon and Insung is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and Insung Information go up and down completely randomly.

Pair Corralation between Eagon Industrial and Insung Information

Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 2.43 times more return on investment than Insung Information. However, Eagon Industrial is 2.43 times more volatile than Insung Information Co. It trades about 0.01 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.1 per unit of risk. If you would invest  510,981  in Eagon Industrial Co on December 23, 2024 and sell it today you would lose (15,981) from holding Eagon Industrial Co or give up 3.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Eagon Industrial Co  vs.  Insung Information Co

Eagon Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagon Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Eagon Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Insung Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insung Information Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Eagon Industrial and Insung Information

The main advantage of trading using opposite Eagon Industrial and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.

The idea behind Eagon Industrial Co and Insung Information Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.