Correlation Between Seagate Technology and Eshallgo

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

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

Diversification Opportunities for Seagate Technology and Eshallgo

-0.45

Correlation Coefficient

Seagate Technology  Eshallgo

Very good diversification

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

Pair Corralation between Seagate Technology and Eshallgo

Considering the 90-day investment horizon Seagate Technology is expected to generate 40.6 times less return on investment than Eshallgo. But when comparing it to its historical volatility, Seagate Technology PLC is 38.37 times less risky than Eshallgo. It trades about 0.07 of its potential returns per unit of risk. Eshallgo Class A is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Eshallgo Class A on December 3, 2024 and sell it today you would earn a total of  112.00  from holding Eshallgo Class A or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	34.14%
Values	Daily Returns

Seagate Technology PLC  vs.  Eshallgo Class A

Seagate Technology PLC

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Seagate Technology PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Seagate Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Eshallgo Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eshallgo Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Seagate Technology and Eshallgo

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

The idea behind Seagate Technology PLC and Eshallgo Class A 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.