Correlation Between Ebang International and MDB Capital

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

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

Diversification Opportunities for Ebang International and MDB Capital

-0.41

Correlation Coefficient

Ebang International  MDB Capital

Very good diversification

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

Pair Corralation between Ebang International and MDB Capital

Given the investment horizon of 90 days Ebang International Holdings is expected to generate 1.44 times more return on investment than MDB Capital. However, Ebang International is 1.44 times more volatile than MDB Capital Holdings,. It trades about 0.02 of its potential returns per unit of risk. MDB Capital Holdings, is currently generating about -0.03 per unit of risk. If you would invest  868.00  in Ebang International Holdings on August 6, 2024 and sell it today you would lose (232.00) from holding Ebang International Holdings or give up 26.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	57.17%
Values	Daily Returns

Ebang International Holdings  vs.  MDB Capital Holdings,

Ebang International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ebang International Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ebang International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

MDB Capital Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MDB Capital Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ebang International and MDB Capital

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

The idea behind Ebang International Holdings and MDB Capital Holdings, 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.