Correlation Between G Shank and Eva Airways

Can any of the company-specific risk be diversified away by investing in both G Shank and Eva Airways 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 G Shank and Eva Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Shank Enterprise Co and Eva Airways Corp, you can compare the effects of market volatilities on G Shank and Eva Airways 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 G Shank with a short position of Eva Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Shank and Eva Airways.

Diversification Opportunities for G Shank and Eva Airways

-0.55

Correlation Coefficient

G Shank  Eva Airways

Excellent diversification

The 3 months correlation between 2476 and Eva is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding G Shank Enterprise Co and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways Corp and G Shank 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 G Shank Enterprise Co are associated (or correlated) with Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of G Shank i.e., G Shank and Eva Airways go up and down completely randomly.

Pair Corralation between G Shank and Eva Airways

Assuming the 90 days trading horizon G Shank Enterprise Co is expected to generate 1.1 times more return on investment than Eva Airways. However, G Shank is 1.1 times more volatile than Eva Airways Corp. It trades about 0.08 of its potential returns per unit of risk. Eva Airways Corp is currently generating about 0.06 per unit of risk. If you would invest  4,312  in G Shank Enterprise Co on September 26, 2024 and sell it today you would earn a total of  4,138  from holding G Shank Enterprise Co or generate 95.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

G Shank Enterprise Co  vs.  Eva Airways Corp

G Shank Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Shank Enterprise Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Eva Airways Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eva Airways Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Eva Airways showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Shank and Eva Airways

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

The idea behind G Shank Enterprise Co and Eva Airways Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.