Correlation Between Eureka Design and Winner Group

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

By analyzing existing cross correlation between Eureka Design Public and Winner Group Enterprise, you can compare the effects of market volatilities on Eureka Design and Winner 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 Eureka Design with a short position of Winner Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Design and Winner Group.

Diversification Opportunities for Eureka Design and Winner Group

-0.62

Correlation Coefficient

Eureka Design  Winner Group

Excellent diversification

The 3 months correlation between Eureka and Winner is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Design Public and Winner Group Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Group Enterprise and Eureka Design 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 Eureka Design Public are associated (or correlated) with Winner Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Group Enterprise has no effect on the direction of Eureka Design i.e., Eureka Design and Winner Group go up and down completely randomly.

Pair Corralation between Eureka Design and Winner Group

Assuming the 90 days trading horizon Eureka Design Public is expected to generate 3.16 times more return on investment than Winner Group. However, Eureka Design is 3.16 times more volatile than Winner Group Enterprise. It trades about 0.73 of its potential returns per unit of risk. Winner Group Enterprise is currently generating about -0.11 per unit of risk. If you would invest  48.00  in Eureka Design Public on September 27, 2024 and sell it today you would earn a total of  58.00  from holding Eureka Design Public or generate 120.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Eureka Design Public  vs.  Winner Group Enterprise

Eureka Design Public

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Eureka Design Public are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Eureka Design sustained solid returns over the last few months and may actually be approaching a breakup point.

Winner Group Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winner Group Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Eureka Design and Winner Group

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

The idea behind Eureka Design Public and Winner Group Enterprise 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.