Correlation Between Cirmaker Technology and EON Resources

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

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

Diversification Opportunities for Cirmaker Technology and EON Resources

0.51

Correlation Coefficient

Cirmaker Technology  EON Resources

Very weak diversification

The 3 months correlation between Cirmaker and EON is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cirmaker Technology and EON Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON Resources and Cirmaker Technology 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 Cirmaker Technology are associated (or correlated) with EON Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON Resources has no effect on the direction of Cirmaker Technology i.e., Cirmaker Technology and EON Resources go up and down completely randomly.

Pair Corralation between Cirmaker Technology and EON Resources

Given the investment horizon of 90 days Cirmaker Technology is expected to generate 1.77 times less return on investment than EON Resources. But when comparing it to its historical volatility, Cirmaker Technology is 2.5 times less risky than EON Resources. It trades about 0.22 of its potential returns per unit of risk. EON Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  84.00  in EON Resources on October 10, 2024 and sell it today you would earn a total of  23.00  from holding EON Resources or generate 27.38% return on investment over 90 days.

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

Cirmaker Technology  vs.  EON Resources

Cirmaker Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirmaker Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Cirmaker Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EON Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Cirmaker Technology and EON Resources

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

The idea behind Cirmaker Technology and EON Resources 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.