Correlation Between Guangdong Marubi and Empyrean Technology

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

By analyzing existing cross correlation between Guangdong Marubi Biotechnology and Empyrean Technology Co, you can compare the effects of market volatilities on Guangdong Marubi and Empyrean Technology 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 Guangdong Marubi with a short position of Empyrean Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Marubi and Empyrean Technology.

Diversification Opportunities for Guangdong Marubi and Empyrean Technology

-0.01

Correlation Coefficient

Guangdong Marubi  Empyrean Technology

Good diversification

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

Pair Corralation between Guangdong Marubi and Empyrean Technology

Assuming the 90 days trading horizon Guangdong Marubi Biotechnology is expected to generate 0.75 times more return on investment than Empyrean Technology. However, Guangdong Marubi Biotechnology is 1.34 times less risky than Empyrean Technology. It trades about -0.15 of its potential returns per unit of risk. Empyrean Technology Co is currently generating about -0.32 per unit of risk. If you would invest  3,434  in Guangdong Marubi Biotechnology on October 25, 2024 and sell it today you would lose (245.00) from holding Guangdong Marubi Biotechnology or give up 7.13% of portfolio value over 90 days.

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

Guangdong Marubi Biotechnology  vs.  Empyrean Technology Co

Guangdong Marubi Bio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Marubi Biotechnology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guangdong Marubi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Empyrean Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Empyrean Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Empyrean Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guangdong Marubi and Empyrean Technology

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

The idea behind Guangdong Marubi Biotechnology and Empyrean Technology Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.