Correlation Between Edimax Technology and Billion Electric

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

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

Diversification Opportunities for Edimax Technology and Billion Electric

-0.52

Correlation Coefficient

Edimax Technology  Billion Electric

Excellent diversification

The 3 months correlation between Edimax and Billion is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Edimax Technology Co and Billion Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Billion Electric and Edimax 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 Edimax Technology Co are associated (or correlated) with Billion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Billion Electric has no effect on the direction of Edimax Technology i.e., Edimax Technology and Billion Electric go up and down completely randomly.

Pair Corralation between Edimax Technology and Billion Electric

Assuming the 90 days trading horizon Edimax Technology Co is expected to under-perform the Billion Electric. But the stock apears to be less risky and, when comparing its historical volatility, Edimax Technology Co is 1.16 times less risky than Billion Electric. The stock trades about -0.14 of its potential returns per unit of risk. The Billion Electric Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,940  in Billion Electric Co on December 24, 2024 and sell it today you would earn a total of  360.00  from holding Billion Electric Co or generate 12.24% return on investment over 90 days.

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

Edimax Technology Co  vs.  Billion Electric Co

Edimax Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edimax Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Billion Electric

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Billion Electric Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Billion Electric showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Edimax Technology and Billion Electric

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

The idea behind Edimax Technology Co and Billion Electric Co 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.