Correlation Between Eestech and Bion Environmental

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

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

Diversification Opportunities for Eestech and Bion Environmental

0.0

Correlation Coefficient

Eestech  Bion Environmental

Pay attention - limited upside

The 3 months correlation between Eestech and Bion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eestech and Bion Environmental Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bion Environmental and Eestech 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 Eestech are associated (or correlated) with Bion Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bion Environmental has no effect on the direction of Eestech i.e., Eestech and Bion Environmental go up and down completely randomly.

Pair Corralation between Eestech and Bion Environmental

If you would invest  22.00  in Bion Environmental Technologies on November 29, 2024 and sell it today you would lose (1.00) from holding Bion Environmental Technologies or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Eestech  vs.  Bion Environmental Technologie

Eestech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eestech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eestech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Bion Environmental

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bion Environmental Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, Bion Environmental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eestech and Bion Environmental

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

The idea behind Eestech and Bion Environmental Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.