Correlation Between Everdisplay Optronics and G-bits Network

Can any of the company-specific risk be diversified away by investing in both Everdisplay Optronics and G-bits Network 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 G-bits Network 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 G bits Network Technology, you can compare the effects of market volatilities on Everdisplay Optronics and G-bits Network 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 G-bits Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everdisplay Optronics and G-bits Network.

Diversification Opportunities for Everdisplay Optronics and G-bits Network

0.06

Correlation Coefficient

Everdisplay Optronics  G-bits Network

Significant diversification

The 3 months correlation between Everdisplay and G-bits is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Everdisplay Optronics Shanghai and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network 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 G-bits Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Everdisplay Optronics i.e., Everdisplay Optronics and G-bits Network go up and down completely randomly.

Pair Corralation between Everdisplay Optronics and G-bits Network

Assuming the 90 days trading horizon Everdisplay Optronics is expected to generate 1.1 times less return on investment than G-bits Network. But when comparing it to its historical volatility, Everdisplay Optronics Shanghai is 1.22 times less risky than G-bits Network. It trades about 0.05 of its potential returns per unit of risk. G bits Network Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  20,229  in G bits Network Technology on December 10, 2024 and sell it today you would earn a total of  2,347  from holding G bits Network Technology or generate 11.6% return on investment over 90 days.

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

Everdisplay Optronics Shanghai  vs.  G bits Network Technology

Everdisplay Optronics

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

G bits Network

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in G bits Network Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, G-bits Network 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 G-bits Network

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

The idea behind Everdisplay Optronics Shanghai and G bits Network 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.