Correlation Between EnTie Commercial and Cayman Tung

Can any of the company-specific risk be diversified away by investing in both EnTie Commercial and Cayman Tung 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 Cayman Tung 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 Cayman Tung Ling, you can compare the effects of market volatilities on EnTie Commercial and Cayman Tung 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 Cayman Tung. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnTie Commercial and Cayman Tung.

Diversification Opportunities for EnTie Commercial and Cayman Tung

-0.01

Correlation Coefficient

EnTie Commercial  Cayman Tung

Good diversification

The 3 months correlation between EnTie and Cayman is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding EnTie Commercial Bank and Cayman Tung Ling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayman Tung Ling 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 Cayman Tung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayman Tung Ling has no effect on the direction of EnTie Commercial i.e., EnTie Commercial and Cayman Tung go up and down completely randomly.

Pair Corralation between EnTie Commercial and Cayman Tung

Assuming the 90 days trading horizon EnTie Commercial is expected to generate 9.47 times less return on investment than Cayman Tung. But when comparing it to its historical volatility, EnTie Commercial Bank is 2.8 times less risky than Cayman Tung. It trades about 0.03 of its potential returns per unit of risk. Cayman Tung Ling is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,700  in Cayman Tung Ling on December 23, 2024 and sell it today you would earn a total of  400.00  from holding Cayman Tung Ling or generate 14.81% return on investment over 90 days.

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

EnTie Commercial Bank  vs.  Cayman Tung Ling

EnTie Commercial Bank

Risk-Adjusted Performance

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.

Cayman Tung Ling

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cayman Tung Ling are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cayman Tung showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EnTie Commercial and Cayman Tung

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

The idea behind EnTie Commercial Bank and Cayman Tung Ling 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.