Correlation Between Ecotel Communication and Advanced Micro

Can any of the company-specific risk be diversified away by investing in both Ecotel Communication and Advanced Micro 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 Ecotel Communication and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ecotel communication ag and Advanced Micro Devices, you can compare the effects of market volatilities on Ecotel Communication and Advanced Micro 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 Ecotel Communication with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecotel Communication and Advanced Micro.

Diversification Opportunities for Ecotel Communication and Advanced Micro

-0.39

Correlation Coefficient

Ecotel Communication  Advanced Micro

Very good diversification

The 3 months correlation between Ecotel and Advanced is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ecotel communication ag and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and Ecotel Communication 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 ecotel communication ag are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Ecotel Communication i.e., Ecotel Communication and Advanced Micro go up and down completely randomly.

Pair Corralation between Ecotel Communication and Advanced Micro

Assuming the 90 days trading horizon ecotel communication ag is expected to generate 0.47 times more return on investment than Advanced Micro. However, ecotel communication ag is 2.11 times less risky than Advanced Micro. It trades about -0.01 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.12 per unit of risk. If you would invest  1,370  in ecotel communication ag on October 25, 2024 and sell it today you would lose (10.00) from holding ecotel communication ag or give up 0.73% of portfolio value over 90 days.

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

ecotel communication ag  vs.  Advanced Micro Devices

ecotel communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ecotel communication ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Ecotel Communication is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Advanced Micro Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Micro Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ecotel Communication and Advanced Micro

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

The idea behind ecotel communication ag and Advanced Micro Devices 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.