Correlation Between ECGI Holdings and MAYBANK EMERGING

Can any of the company-specific risk be diversified away by investing in both ECGI Holdings and MAYBANK EMERGING 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 ECGI Holdings and MAYBANK EMERGING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ECGI Holdings and MAYBANK EMERGING ETF, you can compare the effects of market volatilities on ECGI Holdings and MAYBANK EMERGING 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 ECGI Holdings with a short position of MAYBANK EMERGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECGI Holdings and MAYBANK EMERGING.

Diversification Opportunities for ECGI Holdings and MAYBANK EMERGING

0.45

Correlation Coefficient

ECGI Holdings  MAYBANK EMERGING

Very weak diversification

The 3 months correlation between ECGI and MAYBANK is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ECGI Holdings and MAYBANK EMERGING ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAYBANK EMERGING ETF and ECGI Holdings 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 ECGI Holdings are associated (or correlated) with MAYBANK EMERGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAYBANK EMERGING ETF has no effect on the direction of ECGI Holdings i.e., ECGI Holdings and MAYBANK EMERGING go up and down completely randomly.

Pair Corralation between ECGI Holdings and MAYBANK EMERGING

Given the investment horizon of 90 days ECGI Holdings is expected to generate 15.26 times more return on investment than MAYBANK EMERGING. However, ECGI Holdings is 15.26 times more volatile than MAYBANK EMERGING ETF. It trades about 0.01 of its potential returns per unit of risk. MAYBANK EMERGING ETF is currently generating about -0.13 per unit of risk. If you would invest  0.18  in ECGI Holdings on October 10, 2024 and sell it today you would lose (0.08) from holding ECGI Holdings or give up 44.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

ECGI Holdings  vs.  MAYBANK EMERGING ETF

ECGI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ECGI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady technical and fundamental indicators, ECGI Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MAYBANK EMERGING ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAYBANK EMERGING ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with ECGI Holdings and MAYBANK EMERGING

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

The idea behind ECGI Holdings and MAYBANK EMERGING ETF 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.