Correlation Between Eestech and Cavitation Techs

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

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

Diversification Opportunities for Eestech and Cavitation Techs

0.09

Correlation Coefficient

Eestech  Cavitation Techs

Significant diversification

The 3 months correlation between Eestech and Cavitation is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eestech and Cavitation Techs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavitation Techs and Eestech 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 Eestech are associated (or correlated) with Cavitation Techs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavitation Techs has no effect on the direction of Eestech i.e., Eestech and Cavitation Techs go up and down completely randomly.

Pair Corralation between Eestech and Cavitation Techs

Given the investment horizon of 90 days Eestech is expected to generate 5.67 times more return on investment than Cavitation Techs. However, Eestech is 5.67 times more volatile than Cavitation Techs. It trades about 0.15 of its potential returns per unit of risk. Cavitation Techs is currently generating about 0.13 per unit of risk. If you would invest  0.04  in Eestech on May 5, 2025 and sell it today you would earn a total of  5.96  from holding Eestech or generate 14900.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Eestech  vs.  Cavitation Techs

Eestech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eestech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Eestech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Cavitation Techs

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cavitation Techs are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cavitation Techs unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eestech and Cavitation Techs

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

The idea behind Eestech and Cavitation Techs 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.