Correlation Between Eshallgo and Moving IMage

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

By analyzing existing cross correlation between Eshallgo Class A and Moving iMage Technologies, you can compare the effects of market volatilities on Eshallgo and Moving IMage 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 Eshallgo with a short position of Moving IMage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Moving IMage.

Diversification Opportunities for Eshallgo and Moving IMage

0.68

Correlation Coefficient

Eshallgo  Moving IMage

Poor diversification

The 3 months correlation between Eshallgo and Moving is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Moving iMage Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moving iMage Technologies and Eshallgo 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 Eshallgo Class A are associated (or correlated) with Moving IMage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moving iMage Technologies has no effect on the direction of Eshallgo i.e., Eshallgo and Moving IMage go up and down completely randomly.

Pair Corralation between Eshallgo and Moving IMage

Given the investment horizon of 90 days Eshallgo Class A is expected to generate 1.82 times more return on investment than Moving IMage. However, Eshallgo is 1.82 times more volatile than Moving iMage Technologies. It trades about 0.19 of its potential returns per unit of risk. Moving iMage Technologies is currently generating about 0.09 per unit of risk. If you would invest  210.00  in Eshallgo Class A on September 12, 2024 and sell it today you would earn a total of  211.00  from holding Eshallgo Class A or generate 100.48% return on investment over 90 days.

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

Eshallgo Class A  vs.  Moving iMage Technologies

Eshallgo Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eshallgo Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Eshallgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Moving iMage Technologies

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moving iMage Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Moving IMage reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eshallgo and Moving IMage

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

The idea behind Eshallgo Class A and Moving iMage 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 Transaction History module to view history of all your transactions and understand their impact on performance.