Correlation Between Eshallgo and Knowles Cor

Can any of the company-specific risk be diversified away by investing in both Eshallgo and Knowles Cor 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 Knowles Cor 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 Knowles Cor, you can compare the effects of market volatilities on Eshallgo and Knowles Cor 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 Knowles Cor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Knowles Cor.

Diversification Opportunities for Eshallgo and Knowles Cor

0.81

Correlation Coefficient

Eshallgo  Knowles Cor

Very poor diversification

The 3 months correlation between Eshallgo and Knowles is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Knowles Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles Cor 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 Knowles Cor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles Cor has no effect on the direction of Eshallgo i.e., Eshallgo and Knowles Cor go up and down completely randomly.

Pair Corralation between Eshallgo and Knowles Cor

Given the investment horizon of 90 days Eshallgo Class A is expected to generate 4.48 times more return on investment than Knowles Cor. However, Eshallgo is 4.48 times more volatile than Knowles Cor. It trades about 0.11 of its potential returns per unit of risk. Knowles Cor is currently generating about 0.11 per unit of risk. If you would invest  219.00  in Eshallgo Class A on September 21, 2024 and sell it today you would earn a total of  88.98  from holding Eshallgo Class A or generate 40.63% return on investment over 90 days.

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

Eshallgo Class A  vs.  Knowles Cor

Eshallgo Class A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eshallgo Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Eshallgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Knowles Cor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Knowles Cor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Knowles Cor displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eshallgo and Knowles Cor

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

The idea behind Eshallgo Class A and Knowles Cor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.