Correlation Between ThinTech Materials and Ever Supreme

Can any of the company-specific risk be diversified away by investing in both ThinTech Materials and Ever Supreme 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 ThinTech Materials and Ever Supreme into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ThinTech Materials Technology and Ever Supreme Bio, you can compare the effects of market volatilities on ThinTech Materials and Ever Supreme 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 ThinTech Materials with a short position of Ever Supreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of ThinTech Materials and Ever Supreme.

Diversification Opportunities for ThinTech Materials and Ever Supreme

0.55

Correlation Coefficient

ThinTech Materials  Ever Supreme

Very weak diversification

The 3 months correlation between ThinTech and Ever is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ThinTech Materials Technology and Ever Supreme Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ever Supreme Bio and ThinTech Materials 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 ThinTech Materials Technology are associated (or correlated) with Ever Supreme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ever Supreme Bio has no effect on the direction of ThinTech Materials i.e., ThinTech Materials and Ever Supreme go up and down completely randomly.

Pair Corralation between ThinTech Materials and Ever Supreme

Assuming the 90 days trading horizon ThinTech Materials Technology is expected to under-perform the Ever Supreme. In addition to that, ThinTech Materials is 3.3 times more volatile than Ever Supreme Bio. It trades about -0.28 of its total potential returns per unit of risk. Ever Supreme Bio is currently generating about 0.11 per unit of volatility. If you would invest  17,350  in Ever Supreme Bio on October 23, 2024 and sell it today you would earn a total of  350.00  from holding Ever Supreme Bio or generate 2.02% return on investment over 90 days.

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

ThinTech Materials Technology  vs.  Ever Supreme Bio

ThinTech Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThinTech Materials 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ever Supreme Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ever Supreme Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ever Supreme 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 ThinTech Materials and Ever Supreme

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

The idea behind ThinTech Materials Technology and Ever Supreme Bio 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.