Correlation Between E Ink and Song Shang
Can any of the company-specific risk be diversified away by investing in both E Ink and Song Shang 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 E Ink and Song Shang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Ink Holdings and Song Shang Electronics, you can compare the effects of market volatilities on E Ink and Song Shang 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 E Ink with a short position of Song Shang. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Ink and Song Shang.
Diversification Opportunities for E Ink and Song Shang
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 8069 and Song is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding E Ink Holdings and Song Shang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Shang Electronics and E Ink 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 E Ink Holdings are associated (or correlated) with Song Shang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Shang Electronics has no effect on the direction of E Ink i.e., E Ink and Song Shang go up and down completely randomly.
Pair Corralation between E Ink and Song Shang
Assuming the 90 days trading horizon E Ink is expected to generate 1.84 times less return on investment than Song Shang. In addition to that, E Ink is 1.45 times more volatile than Song Shang Electronics. It trades about 0.04 of its total potential returns per unit of risk. Song Shang Electronics is currently generating about 0.11 per unit of volatility. If you would invest 2,595 in Song Shang Electronics on December 29, 2024 and sell it today you would earn a total of 270.00 from holding Song Shang Electronics or generate 10.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
E Ink Holdings vs. Song Shang Electronics
Performance |
Timeline |
E Ink Holdings |
Song Shang Electronics |
E Ink and Song Shang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with E Ink and Song Shang
The main advantage of trading using opposite E Ink and Song Shang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Ink position performs unexpectedly, Song Shang 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 Song Shang will offset losses from the drop in Song Shang's long position.E Ink vs. Unimicron Technology Corp | E Ink vs. Innolux Corp | E Ink vs. Delta Electronics | E Ink vs. Novatek Microelectronics Corp |
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Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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