Correlation Between EPlus and Duos Technologies

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

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

Diversification Opportunities for EPlus and Duos Technologies

-0.05

Correlation Coefficient

EPlus  Duos Technologies

Good diversification

The 3 months correlation between EPlus and Duos is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Duos Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duos Technologies and EPlus 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 ePlus inc are associated (or correlated) with Duos Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duos Technologies has no effect on the direction of EPlus i.e., EPlus and Duos Technologies go up and down completely randomly.

Pair Corralation between EPlus and Duos Technologies

Given the investment horizon of 90 days ePlus inc is expected to under-perform the Duos Technologies. But the stock apears to be less risky and, when comparing its historical volatility, ePlus inc is 3.39 times less risky than Duos Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Duos Technologies Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  537.00  in Duos Technologies Group on December 24, 2024 and sell it today you would earn a total of  81.00  from holding Duos Technologies Group or generate 15.08% return on investment over 90 days.

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

ePlus inc  vs.  Duos Technologies Group

ePlus inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Duos Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Duos Technologies Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Duos Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EPlus and Duos Technologies

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

The idea behind ePlus inc and Duos Technologies Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.