Correlation Between EMemory Technology and Grand Plastic

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

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

Diversification Opportunities for EMemory Technology and Grand Plastic

0.01

Correlation Coefficient

EMemory Technology  Grand Plastic

Significant diversification

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

Pair Corralation between EMemory Technology and Grand Plastic

Assuming the 90 days trading horizon EMemory Technology is expected to generate 2.72 times less return on investment than Grand Plastic. But when comparing it to its historical volatility, eMemory Technology is 1.21 times less risky than Grand Plastic. It trades about 0.05 of its potential returns per unit of risk. Grand Plastic Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  25,772  in Grand Plastic Technology on December 3, 2024 and sell it today you would earn a total of  101,228  from holding Grand Plastic Technology or generate 392.78% return on investment over 90 days.

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

eMemory Technology  vs.  Grand Plastic Technology

eMemory Technology

Risk-Adjusted Performance

Weak

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

Grand Plastic Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grand Plastic Technology 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.

Pair Trading with EMemory Technology and Grand Plastic

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

The idea behind eMemory Technology and Grand Plastic Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.