Correlation Between Arm Holdings and Eshallgo

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

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

Diversification Opportunities for Arm Holdings and Eshallgo

-0.41

Correlation Coefficient

Arm Holdings  Eshallgo

Very good diversification

The 3 months correlation between Arm and Eshallgo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Arm Holdings plc and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A and Arm Holdings 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 Arm Holdings plc are associated (or correlated) with Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Arm Holdings i.e., Arm Holdings and Eshallgo go up and down completely randomly.

Pair Corralation between Arm Holdings and Eshallgo

Considering the 90-day investment horizon Arm Holdings plc is expected to generate 0.56 times more return on investment than Eshallgo. However, Arm Holdings plc is 1.79 times less risky than Eshallgo. It trades about 0.02 of its potential returns per unit of risk. Eshallgo Class A is currently generating about -0.11 per unit of risk. If you would invest  13,554  in Arm Holdings plc on May 28, 2025 and sell it today you would earn a total of  224.00  from holding Arm Holdings plc or generate 1.65% return on investment over 90 days.

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

Arm Holdings plc  vs.  Eshallgo Class A

Arm Holdings plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arm Holdings plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Arm Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Eshallgo Class A

Risk-Adjusted Performance

Weakest

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

Pair Trading with Arm Holdings and Eshallgo

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

The idea behind Arm Holdings plc and Eshallgo Class A 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.