Correlation Between DAEA TI and EO Technics

Can any of the company-specific risk be diversified away by investing in both DAEA TI and EO Technics 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 DAEA TI and EO Technics into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for DAEA TI and EO Technics

-0.34

Correlation Coefficient

DAEA TI  EO Technics

Very good diversification

The 3 months correlation between DAEA and 039030 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding DAEA TI Co and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics and DAEA TI 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 DAEA TI Co are associated (or correlated) with EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of DAEA TI i.e., DAEA TI and EO Technics go up and down completely randomly.

Pair Corralation between DAEA TI and EO Technics

Assuming the 90 days trading horizon DAEA TI Co is expected to generate 0.59 times more return on investment than EO Technics. However, DAEA TI Co is 1.69 times less risky than EO Technics. It trades about 0.06 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.05 per unit of risk. If you would invest  259,000  in DAEA TI Co on September 4, 2024 and sell it today you would earn a total of  16,500  from holding DAEA TI Co or generate 6.37% return on investment over 90 days.

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

DAEA TI Co  vs.  EO Technics Co

DAEA TI

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DAEA TI Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, DAEA TI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

EO Technics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EO Technics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DAEA TI and EO Technics

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

The idea behind DAEA TI Co and EO Technics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.