Correlation Between Ehang Holdings and Tat Techno

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

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

Diversification Opportunities for Ehang Holdings and Tat Techno

-0.69

Correlation Coefficient

Ehang Holdings  Tat Techno

Excellent diversification

The 3 months correlation between Ehang and Tat is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and Tat Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tat Techno and Ehang 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 Ehang Holdings are associated (or correlated) with Tat Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tat Techno has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and Tat Techno go up and down completely randomly.

Pair Corralation between Ehang Holdings and Tat Techno

Allowing for the 90-day total investment horizon Ehang Holdings is expected to under-perform the Tat Techno. In addition to that, Ehang Holdings is 1.75 times more volatile than Tat Techno. It trades about -0.06 of its total potential returns per unit of risk. Tat Techno is currently generating about 0.18 per unit of volatility. If you would invest  1,146  in Tat Techno on February 11, 2024 and sell it today you would earn a total of  108.00  from holding Tat Techno or generate 9.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Ehang Holdings  vs.  Tat Techno

Ehang Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ehang Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Ehang Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Tat Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tat Techno has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tat Techno is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ehang Holdings and Tat Techno

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

The idea behind Ehang Holdings and Tat Techno 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.