Correlation Between Ever Shine and Bank Central
Can any of the company-specific risk be diversified away by investing in both Ever Shine and Bank Central 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 Ever Shine and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ever Shine Textile and Bank Central Asia, you can compare the effects of market volatilities on Ever Shine and Bank Central 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 Ever Shine with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ever Shine and Bank Central.
Diversification Opportunities for Ever Shine and Bank Central
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ever and Bank is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ever Shine Textile and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Ever Shine 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 Ever Shine Textile are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Ever Shine i.e., Ever Shine and Bank Central go up and down completely randomly.
Pair Corralation between Ever Shine and Bank Central
Assuming the 90 days trading horizon Ever Shine Textile is expected to under-perform the Bank Central. In addition to that, Ever Shine is 2.96 times more volatile than Bank Central Asia. It trades about -0.78 of its total potential returns per unit of risk. Bank Central Asia is currently generating about -0.14 per unit of volatility. If you would invest 989,694 in Bank Central Asia on January 20, 2024 and sell it today you would lose (42,194) from holding Bank Central Asia or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ever Shine Textile vs. Bank Central Asia
Performance |
| Timeline |
| Ever Shine Textile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank Central Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Ever Shine and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ever Shine and Bank Central
The main advantage of trading using opposite Ever Shine and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ever Shine position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.The idea behind Ever Shine Textile and Bank Central Asia 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.Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |