Correlation Between Echomarketing CoLtd and Silla Sg

Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd and Silla Sg 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 Echomarketing CoLtd and Silla Sg into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Echomarketing CoLtd and Silla Sg

0.25

Correlation Coefficient

Echomarketing CoLtd  Silla Sg

Modest diversification

The 3 months correlation between Echomarketing and Silla is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd and Silla Sg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silla Sg and Echomarketing CoLtd 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 Echomarketing CoLtd are associated (or correlated) with Silla Sg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silla Sg has no effect on the direction of Echomarketing CoLtd i.e., Echomarketing CoLtd and Silla Sg go up and down completely randomly.

Pair Corralation between Echomarketing CoLtd and Silla Sg

Assuming the 90 days trading horizon Echomarketing CoLtd is expected to under-perform the Silla Sg. But the stock apears to be less risky and, when comparing its historical volatility, Echomarketing CoLtd is 2.27 times less risky than Silla Sg. The stock trades about -0.03 of its potential returns per unit of risk. The Silla Sg Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  593,000  in Silla Sg Co on December 2, 2024 and sell it today you would earn a total of  4,000  from holding Silla Sg Co or generate 0.67% return on investment over 90 days.

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

Echomarketing CoLtd  vs.  Silla Sg Co

Echomarketing CoLtd

Risk-Adjusted Performance

Very Weak

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

Silla Sg

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silla Sg Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Silla Sg may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Echomarketing CoLtd and Silla Sg

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

The idea behind Echomarketing CoLtd and Silla Sg 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.