Correlation Between EBEST Investment and Eugene Technology

Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Eugene Technology 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 EBEST Investment and Eugene Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EBEST Investment Securities and Eugene Technology CoLtd, you can compare the effects of market volatilities on EBEST Investment and Eugene Technology 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 EBEST Investment with a short position of Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Eugene Technology.

Diversification Opportunities for EBEST Investment and Eugene Technology

0.76

Correlation Coefficient

EBEST Investment  Eugene Technology

Poor diversification

The 3 months correlation between EBEST and Eugene is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Eugene Technology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Technology CoLtd and EBEST 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 EBEST Investment Securities are associated (or correlated) with Eugene Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Technology CoLtd has no effect on the direction of EBEST Investment i.e., EBEST Investment and Eugene Technology go up and down completely randomly.

Pair Corralation between EBEST Investment and Eugene Technology

Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Eugene Technology. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.82 times less risky than Eugene Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Eugene Technology CoLtd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,396,187  in Eugene Technology CoLtd on September 17, 2024 and sell it today you would earn a total of  993,813  from holding Eugene Technology CoLtd or generate 41.47% return on investment over 90 days.

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

EBEST Investment Securities  vs.  Eugene Technology CoLtd

EBEST Investment Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EBEST Investment Securities 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.

Eugene Technology CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with EBEST Investment and Eugene Technology

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

The idea behind EBEST Investment Securities and Eugene Technology CoLtd 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.