Correlation Between Cub Elecparts and E Lead

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

By analyzing existing cross correlation between Cub Elecparts and E Lead Electronic Co, you can compare the effects of market volatilities on Cub Elecparts and E Lead 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 Cub Elecparts with a short position of E Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cub Elecparts and E Lead.

Diversification Opportunities for Cub Elecparts and E Lead

-0.29

Correlation Coefficient

Cub Elecparts  E Lead

Very good diversification

The 3 months correlation between Cub and 2497 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cub Elecparts and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic and Cub Elecparts 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 Cub Elecparts are associated (or correlated) with E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of Cub Elecparts i.e., Cub Elecparts and E Lead go up and down completely randomly.

Pair Corralation between Cub Elecparts and E Lead

Assuming the 90 days trading horizon Cub Elecparts is expected to generate 0.65 times more return on investment than E Lead. However, Cub Elecparts is 1.55 times less risky than E Lead. It trades about 0.03 of its potential returns per unit of risk. E Lead Electronic Co is currently generating about -0.02 per unit of risk. If you would invest  9,740  in Cub Elecparts on September 4, 2024 and sell it today you would earn a total of  250.00  from holding Cub Elecparts or generate 2.57% return on investment over 90 days.

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

Cub Elecparts  vs.  E Lead Electronic Co

Cub Elecparts

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cub Elecparts are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Cub Elecparts is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

E Lead Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Lead Electronic Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, E Lead is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Cub Elecparts and E Lead

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

The idea behind Cub Elecparts and E Lead Electronic Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.