Correlation Between EA Technique and Swift Haulage

Can any of the company-specific risk be diversified away by investing in both EA Technique and Swift Haulage 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 EA Technique and Swift Haulage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EA Technique M and Swift Haulage Bhd, you can compare the effects of market volatilities on EA Technique and Swift Haulage 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 EA Technique with a short position of Swift Haulage. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Technique and Swift Haulage.

Diversification Opportunities for EA Technique and Swift Haulage

0.06

Correlation Coefficient

EA Technique  Swift Haulage

Significant diversification

The 3 months correlation between 5259 and Swift is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding EA Technique M and Swift Haulage Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Haulage Bhd and EA Technique 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 EA Technique M are associated (or correlated) with Swift Haulage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Haulage Bhd has no effect on the direction of EA Technique i.e., EA Technique and Swift Haulage go up and down completely randomly.

Pair Corralation between EA Technique and Swift Haulage

Assuming the 90 days trading horizon EA Technique M is expected to generate 2.04 times more return on investment than Swift Haulage. However, EA Technique is 2.04 times more volatile than Swift Haulage Bhd. It trades about 0.0 of its potential returns per unit of risk. Swift Haulage Bhd is currently generating about -0.11 per unit of risk. If you would invest  30.00  in EA Technique M on December 1, 2024 and sell it today you would lose (1.00) from holding EA Technique M or give up 3.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

EA Technique M  vs.  Swift Haulage Bhd

EA Technique M

Risk-Adjusted Performance

Very Weak

Over the last 90 days EA Technique M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, EA Technique is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Swift Haulage Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Swift Haulage Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with EA Technique and Swift Haulage

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

The idea behind EA Technique M and Swift Haulage Bhd 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.