Correlation Between E Lead and Amulaire Thermal

Can any of the company-specific risk be diversified away by investing in both E Lead and Amulaire Thermal 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 E Lead and Amulaire Thermal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E Lead Electronic Co and Amulaire Thermal Technology, you can compare the effects of market volatilities on E Lead and Amulaire Thermal 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 E Lead with a short position of Amulaire Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Lead and Amulaire Thermal.

Diversification Opportunities for E Lead and Amulaire Thermal

0.36

Correlation Coefficient

E Lead  Amulaire Thermal

Weak diversification

The 3 months correlation between 2497 and Amulaire is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding E Lead Electronic Co and Amulaire Thermal Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amulaire Thermal Tec and E Lead 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 E Lead Electronic Co are associated (or correlated) with Amulaire Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amulaire Thermal Tec has no effect on the direction of E Lead i.e., E Lead and Amulaire Thermal go up and down completely randomly.

Pair Corralation between E Lead and Amulaire Thermal

Assuming the 90 days trading horizon E Lead Electronic Co is expected to under-perform the Amulaire Thermal. But the stock apears to be less risky and, when comparing its historical volatility, E Lead Electronic Co is 1.81 times less risky than Amulaire Thermal. The stock trades about -0.13 of its potential returns per unit of risk. The Amulaire Thermal Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,060  in Amulaire Thermal Technology on December 3, 2024 and sell it today you would earn a total of  10.00  from holding Amulaire Thermal Technology or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.25%
Values	Daily Returns

E Lead Electronic Co  vs.  Amulaire Thermal Technology

E Lead Electronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days E Lead Electronic Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Amulaire Thermal Tec

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amulaire Thermal Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Amulaire Thermal is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with E Lead and Amulaire Thermal

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

The idea behind E Lead Electronic Co and Amulaire Thermal Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.