Correlation Between Ebang International and SCHMID Group

Can any of the company-specific risk be diversified away by investing in both Ebang International and SCHMID Group 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 Ebang International and SCHMID Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ebang International Holdings and SCHMID Group NV, you can compare the effects of market volatilities on Ebang International and SCHMID Group 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 Ebang International with a short position of SCHMID Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebang International and SCHMID Group.

Diversification Opportunities for Ebang International and SCHMID Group

-0.28

Correlation Coefficient

Ebang International  SCHMID Group

Very good diversification

The 3 months correlation between Ebang and SCHMID is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ebang International Holdings and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV and Ebang International 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 Ebang International Holdings are associated (or correlated) with SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of Ebang International i.e., Ebang International and SCHMID Group go up and down completely randomly.

Pair Corralation between Ebang International and SCHMID Group

Given the investment horizon of 90 days Ebang International Holdings is expected to generate 1.36 times more return on investment than SCHMID Group. However, Ebang International is 1.36 times more volatile than SCHMID Group NV. It trades about 0.05 of its potential returns per unit of risk. SCHMID Group NV is currently generating about -0.05 per unit of risk. If you would invest  573.00  in Ebang International Holdings on October 25, 2024 and sell it today you would earn a total of  31.00  from holding Ebang International Holdings or generate 5.41% return on investment over 90 days.

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

Ebang International Holdings  vs.  SCHMID Group NV

Ebang International

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ebang International Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ebang International displayed solid returns over the last few months and may actually be approaching a breakup point.

SCHMID Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHMID Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ebang International and SCHMID Group

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

The idea behind Ebang International Holdings and SCHMID Group NV 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.