Correlation Between Eoptolink Technology and Beijing Enlight

Can any of the company-specific risk be diversified away by investing in both Eoptolink Technology and Beijing Enlight 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 Eoptolink Technology and Beijing Enlight into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eoptolink Technology and Beijing Enlight Media, you can compare the effects of market volatilities on Eoptolink Technology and Beijing Enlight 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 Eoptolink Technology with a short position of Beijing Enlight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eoptolink Technology and Beijing Enlight.

Diversification Opportunities for Eoptolink Technology and Beijing Enlight

-0.57

Correlation Coefficient

Eoptolink Technology  Beijing Enlight

Excellent diversification

The 3 months correlation between Eoptolink and Beijing is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eoptolink Technology and Beijing Enlight Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enlight Media and Eoptolink Technology 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 Eoptolink Technology are associated (or correlated) with Beijing Enlight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enlight Media has no effect on the direction of Eoptolink Technology i.e., Eoptolink Technology and Beijing Enlight go up and down completely randomly.

Pair Corralation between Eoptolink Technology and Beijing Enlight

Assuming the 90 days trading horizon Eoptolink Technology is expected to under-perform the Beijing Enlight. But the stock apears to be less risky and, when comparing its historical volatility, Eoptolink Technology is 1.59 times less risky than Beijing Enlight. The stock trades about -0.08 of its potential returns per unit of risk. The Beijing Enlight Media is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  957.00  in Beijing Enlight Media on December 27, 2024 and sell it today you would earn a total of  1,184  from holding Beijing Enlight Media or generate 123.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Eoptolink Technology  vs.  Beijing Enlight Media

Eoptolink Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eoptolink Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Beijing Enlight Media

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beijing Enlight Media are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beijing Enlight sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eoptolink Technology and Beijing Enlight

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

The idea behind Eoptolink Technology and Beijing Enlight Media 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.