Correlation Between Emerging Display and Tacheng Real

Can any of the company-specific risk be diversified away by investing in both Emerging Display and Tacheng Real 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 Emerging Display and Tacheng Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Emerging Display Technologies and Tacheng Real Estate, you can compare the effects of market volatilities on Emerging Display and Tacheng Real 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 Emerging Display with a short position of Tacheng Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Tacheng Real.

Diversification Opportunities for Emerging Display and Tacheng Real

0.65

Correlation Coefficient

Emerging Display  Tacheng Real

Poor diversification

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

Pair Corralation between Emerging Display and Tacheng Real

Assuming the 90 days trading horizon Emerging Display Technologies is expected to generate 2.84 times more return on investment than Tacheng Real. However, Emerging Display is 2.84 times more volatile than Tacheng Real Estate. It trades about 0.03 of its potential returns per unit of risk. Tacheng Real Estate is currently generating about -0.25 per unit of risk. If you would invest  2,735  in Emerging Display Technologies on October 8, 2024 and sell it today you would earn a total of  25.00  from holding Emerging Display Technologies or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Emerging Display Technologies  vs.  Tacheng Real Estate

Emerging Display Tec

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Display Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Emerging Display may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tacheng Real Estate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tacheng Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tacheng Real 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 Emerging Display and Tacheng Real

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

The idea behind Emerging Display Technologies and Tacheng Real Estate 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.