Correlation Between Eshallgo and Applied DNA

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

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

Diversification Opportunities for Eshallgo and Applied DNA

-0.6

Correlation Coefficient

Eshallgo  Applied DNA

Excellent diversification

The 3 months correlation between Eshallgo and Applied is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Applied DNA Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied DNA Sciences and Eshallgo 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 Eshallgo Class A are associated (or correlated) with Applied DNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied DNA Sciences has no effect on the direction of Eshallgo i.e., Eshallgo and Applied DNA go up and down completely randomly.

Pair Corralation between Eshallgo and Applied DNA

Given the investment horizon of 90 days Eshallgo Class A is expected to generate 0.61 times more return on investment than Applied DNA. However, Eshallgo Class A is 1.63 times less risky than Applied DNA. It trades about 0.19 of its potential returns per unit of risk. Applied DNA Sciences is currently generating about -0.17 per unit of risk. If you would invest  215.00  in Eshallgo Class A on September 15, 2024 and sell it today you would earn a total of  220.00  from holding Eshallgo Class A or generate 102.33% return on investment over 90 days.

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

Eshallgo Class A  vs.  Applied DNA Sciences

Eshallgo Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eshallgo Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Eshallgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Applied DNA Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Eshallgo and Applied DNA

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

The idea behind Eshallgo Class A and Applied DNA Sciences 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.