Correlation Between EnTie Commercial and Evergreen International

Can any of the company-specific risk be diversified away by investing in both EnTie Commercial and Evergreen International 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 EnTie Commercial and Evergreen International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EnTie Commercial Bank and Evergreen International Storage, you can compare the effects of market volatilities on EnTie Commercial and Evergreen International 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 EnTie Commercial with a short position of Evergreen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnTie Commercial and Evergreen International.

Diversification Opportunities for EnTie Commercial and Evergreen International

0.65

Correlation Coefficient

EnTie Commercial  Evergreen International

Poor diversification

The 3 months correlation between EnTie and Evergreen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EnTie Commercial Bank and Evergreen International Storag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen International and EnTie Commercial 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 EnTie Commercial Bank are associated (or correlated) with Evergreen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen International has no effect on the direction of EnTie Commercial i.e., EnTie Commercial and Evergreen International go up and down completely randomly.

Pair Corralation between EnTie Commercial and Evergreen International

Assuming the 90 days trading horizon EnTie Commercial is expected to generate 1.29 times less return on investment than Evergreen International. But when comparing it to its historical volatility, EnTie Commercial Bank is 1.03 times less risky than Evergreen International. It trades about 0.03 of its potential returns per unit of risk. Evergreen International Storage is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,125  in Evergreen International Storage on December 31, 2024 and sell it today you would earn a total of  75.00  from holding Evergreen International Storage or generate 2.4% return on investment over 90 days.

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

EnTie Commercial Bank  vs.  Evergreen International Storag

EnTie Commercial Bank

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EnTie Commercial Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, EnTie Commercial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Evergreen International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen International Storage are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Evergreen International 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 EnTie Commercial and Evergreen International

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

The idea behind EnTie Commercial Bank and Evergreen International Storage 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.