Correlation Between Tainergy Tech and Epileds Technologies

Can any of the company-specific risk be diversified away by investing in both Tainergy Tech and Epileds Technologies 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 Tainergy Tech and Epileds Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Tainergy Tech and Epileds Technologies

0.89

Correlation Coefficient

Tainergy Tech  Epileds Technologies

Very poor diversification

The 3 months correlation between Tainergy and Epileds is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tainergy Tech Co and Epileds Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epileds Technologies and Tainergy Tech 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 Tainergy Tech Co are associated (or correlated) with Epileds Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epileds Technologies has no effect on the direction of Tainergy Tech i.e., Tainergy Tech and Epileds Technologies go up and down completely randomly.

Pair Corralation between Tainergy Tech and Epileds Technologies

Assuming the 90 days trading horizon Tainergy Tech Co is expected to generate 0.94 times more return on investment than Epileds Technologies. However, Tainergy Tech Co is 1.06 times less risky than Epileds Technologies. It trades about -0.03 of its potential returns per unit of risk. Epileds Technologies is currently generating about -0.05 per unit of risk. If you would invest  1,290  in Tainergy Tech Co on October 24, 2024 and sell it today you would lose (40.00) from holding Tainergy Tech Co or give up 3.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Tainergy Tech Co  vs.  Epileds Technologies

Tainergy Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tainergy Tech Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Epileds Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Epileds Technologies 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.

Pair Trading with Tainergy Tech and Epileds Technologies

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

The idea behind Tainergy Tech Co and Epileds Technologies 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 Anywhere module to track or share privately all of your investments from the convenience of any device.