Correlation Between Equifax and Neo Concept

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

By analyzing existing cross correlation between Equifax and Neo Concept International Group, you can compare the effects of market volatilities on Equifax and Neo Concept 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 Equifax with a short position of Neo Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and Neo Concept.

Diversification Opportunities for Equifax and Neo Concept

-0.07

Correlation Coefficient

Equifax  Neo Concept

Good diversification

The 3 months correlation between Equifax and Neo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and Neo Concept International Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Concept Internat and Equifax 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 Equifax are associated (or correlated) with Neo Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Concept Internat has no effect on the direction of Equifax i.e., Equifax and Neo Concept go up and down completely randomly.

Pair Corralation between Equifax and Neo Concept

Considering the 90-day investment horizon Equifax is expected to under-perform the Neo Concept. But the stock apears to be less risky and, when comparing its historical volatility, Equifax is 10.75 times less risky than Neo Concept. The stock trades about -0.15 of its potential returns per unit of risk. The Neo Concept International Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Neo Concept International Group on September 13, 2024 and sell it today you would earn a total of  5.00  from holding Neo Concept International Group or generate 9.8% return on investment over 90 days.

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

Equifax  vs.  Neo Concept International Grou

Equifax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equifax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Neo Concept Internat

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Neo Concept International Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Neo Concept demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equifax and Neo Concept

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

The idea behind Equifax and Neo Concept International 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.