Correlation Between Eva Airways and King Slide
Can any of the company-specific risk be diversified away by investing in both Eva Airways and King Slide 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 Eva Airways and King Slide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eva Airways Corp and King Slide Works, you can compare the effects of market volatilities on Eva Airways and King Slide 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 Eva Airways with a short position of King Slide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eva Airways and King Slide.
Diversification Opportunities for Eva Airways and King Slide
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eva and King is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eva Airways Corp and King Slide Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Slide Works and Eva Airways 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 Eva Airways Corp are associated (or correlated) with King Slide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Slide Works has no effect on the direction of Eva Airways i.e., Eva Airways and King Slide go up and down completely randomly.
Pair Corralation between Eva Airways and King Slide
Assuming the 90 days trading horizon Eva Airways is expected to generate 1.38 times less return on investment than King Slide. But when comparing it to its historical volatility, Eva Airways Corp is 1.83 times less risky than King Slide. It trades about 0.19 of its potential returns per unit of risk. King Slide Works is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 116,000 in King Slide Works on September 25, 2024 and sell it today you would earn a total of 33,000 from holding King Slide Works or generate 28.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Eva Airways Corp vs. King Slide Works
Performance |
Timeline |
Eva Airways Corp |
King Slide Works |
Eva Airways and King Slide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eva Airways and King Slide
The main advantage of trading using opposite Eva Airways and King Slide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eva Airways position performs unexpectedly, King Slide 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 King Slide will offset losses from the drop in King Slide's long position.Eva Airways vs. Yang Ming Marine | Eva Airways vs. Evergreen Marine Corp | Eva Airways vs. U Ming Marine Transport |
King Slide vs. Yang Ming Marine | King Slide vs. Evergreen Marine Corp | King Slide vs. Eva Airways Corp | King Slide vs. U Ming Marine Transport |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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