Correlation Between Episil Holding and Visual Photonics

Can any of the company-specific risk be diversified away by investing in both Episil Holding and Visual Photonics 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 Episil Holding and Visual Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Episil Holding and Visual Photonics Epitaxy, you can compare the effects of market volatilities on Episil Holding and Visual Photonics 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 Episil Holding with a short position of Visual Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Episil Holding and Visual Photonics.

Diversification Opportunities for Episil Holding and Visual Photonics

-0.62

Correlation Coefficient

Episil Holding  Visual Photonics

Excellent diversification

The 3 months correlation between Episil and Visual is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Episil Holding and Visual Photonics Epitaxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visual Photonics Epitaxy and Episil Holding 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 Episil Holding are associated (or correlated) with Visual Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visual Photonics Epitaxy has no effect on the direction of Episil Holding i.e., Episil Holding and Visual Photonics go up and down completely randomly.

Pair Corralation between Episil Holding and Visual Photonics

Assuming the 90 days trading horizon Episil Holding is expected to under-perform the Visual Photonics. In addition to that, Episil Holding is 1.31 times more volatile than Visual Photonics Epitaxy. It trades about -0.12 of its total potential returns per unit of risk. Visual Photonics Epitaxy is currently generating about -0.08 per unit of volatility. If you would invest  16,750  in Visual Photonics Epitaxy on October 9, 2024 and sell it today you would lose (800.00) from holding Visual Photonics Epitaxy or give up 4.78% of portfolio value over 90 days.

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

Episil Holding  vs.  Visual Photonics Epitaxy

Episil Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Episil Holding 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.

Visual Photonics Epitaxy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Visual Photonics Epitaxy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Visual Photonics 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 Episil Holding and Visual Photonics

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

The idea behind Episil Holding and Visual Photonics Epitaxy 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.