Correlation Between EMPEROR ENT and ALLFUNDS GROUP

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

By analyzing existing cross correlation between EMPEROR ENT HOTEL and ALLFUNDS GROUP EO 0025, you can compare the effects of market volatilities on EMPEROR ENT and ALLFUNDS 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 EMPEROR ENT with a short position of ALLFUNDS GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMPEROR ENT and ALLFUNDS GROUP.

Diversification Opportunities for EMPEROR ENT and ALLFUNDS GROUP

0.04

Correlation Coefficient

EMPEROR ENT  ALLFUNDS GROUP

Significant diversification

The 3 months correlation between EMPEROR and ALLFUNDS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding EMPEROR ENT HOTEL and ALLFUNDS GROUP EO 0025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLFUNDS GROUP EO and EMPEROR ENT 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 EMPEROR ENT HOTEL are associated (or correlated) with ALLFUNDS GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLFUNDS GROUP EO has no effect on the direction of EMPEROR ENT i.e., EMPEROR ENT and ALLFUNDS GROUP go up and down completely randomly.

Pair Corralation between EMPEROR ENT and ALLFUNDS GROUP

Assuming the 90 days trading horizon EMPEROR ENT HOTEL is expected to generate 3.26 times more return on investment than ALLFUNDS GROUP. However, EMPEROR ENT is 3.26 times more volatile than ALLFUNDS GROUP EO 0025. It trades about 0.03 of its potential returns per unit of risk. ALLFUNDS GROUP EO 0025 is currently generating about -0.02 per unit of risk. If you would invest  4.08  in EMPEROR ENT HOTEL on October 11, 2024 and sell it today you would lose (0.58) from holding EMPEROR ENT HOTEL or give up 14.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

EMPEROR ENT HOTEL  vs.  ALLFUNDS GROUP EO 0025

EMPEROR ENT HOTEL

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EMPEROR ENT HOTEL are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, EMPEROR ENT exhibited solid returns over the last few months and may actually be approaching a breakup point.

ALLFUNDS GROUP EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALLFUNDS GROUP EO 0025 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALLFUNDS GROUP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EMPEROR ENT and ALLFUNDS GROUP

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

The idea behind EMPEROR ENT HOTEL and ALLFUNDS GROUP EO 0025 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.