Correlation Between Etao International and MultiPlan

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

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

Diversification Opportunities for Etao International and MultiPlan

0.14

Correlation Coefficient

Etao International  MultiPlan

Average diversification

The 3 months correlation between Etao and MultiPlan is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Etao International Co, and MultiPlan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MultiPlan and Etao International 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 Etao International Co, are associated (or correlated) with MultiPlan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MultiPlan has no effect on the direction of Etao International i.e., Etao International and MultiPlan go up and down completely randomly.

Pair Corralation between Etao International and MultiPlan

If you would invest  5.00  in Etao International Co, on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Etao International Co, or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Etao International Co,  vs.  MultiPlan

Etao International Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Etao International Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Etao International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

MultiPlan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MultiPlan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Etao International and MultiPlan

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

The idea behind Etao International Co, and MultiPlan 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.