Correlation Between Everdisplay Optronics and Cloud Live

Can any of the company-specific risk be diversified away by investing in both Everdisplay Optronics and Cloud Live 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 Everdisplay Optronics and Cloud Live into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Everdisplay Optronics Shanghai and Cloud Live Technology, you can compare the effects of market volatilities on Everdisplay Optronics and Cloud Live 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 Everdisplay Optronics with a short position of Cloud Live. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everdisplay Optronics and Cloud Live.

Diversification Opportunities for Everdisplay Optronics and Cloud Live

0.56

Correlation Coefficient

Everdisplay Optronics  Cloud Live

Very weak diversification

The 3 months correlation between Everdisplay and Cloud is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Everdisplay Optronics Shanghai and Cloud Live Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Live Technology and Everdisplay Optronics 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 Everdisplay Optronics Shanghai are associated (or correlated) with Cloud Live. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Live Technology has no effect on the direction of Everdisplay Optronics i.e., Everdisplay Optronics and Cloud Live go up and down completely randomly.

Pair Corralation between Everdisplay Optronics and Cloud Live

Assuming the 90 days trading horizon Everdisplay Optronics Shanghai is expected to generate 0.42 times more return on investment than Cloud Live. However, Everdisplay Optronics Shanghai is 2.37 times less risky than Cloud Live. It trades about -0.21 of its potential returns per unit of risk. Cloud Live Technology is currently generating about -0.29 per unit of risk. If you would invest  247.00  in Everdisplay Optronics Shanghai on October 6, 2024 and sell it today you would lose (23.00) from holding Everdisplay Optronics Shanghai or give up 9.31% of portfolio value over 90 days.

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

Everdisplay Optronics Shanghai  vs.  Cloud Live Technology

Everdisplay Optronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everdisplay Optronics Shanghai has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cloud Live Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cloud Live Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cloud Live is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Everdisplay Optronics and Cloud Live

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

The idea behind Everdisplay Optronics Shanghai and Cloud Live Technology 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.