Correlation Between ECB Bancorp and Qomolangma Acquisition

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

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

Diversification Opportunities for ECB Bancorp and Qomolangma Acquisition

-0.86

Correlation Coefficient

ECB Bancorp  Qomolangma Acquisition

Pay attention - limited upside

The 3 months correlation between ECB and Qomolangma is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ECB Bancorp and Qomolangma Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qomolangma Acquisition and ECB Bancorp 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 ECB Bancorp are associated (or correlated) with Qomolangma Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qomolangma Acquisition has no effect on the direction of ECB Bancorp i.e., ECB Bancorp and Qomolangma Acquisition go up and down completely randomly.

Pair Corralation between ECB Bancorp and Qomolangma Acquisition

Given the investment horizon of 90 days ECB Bancorp is expected to generate 1.4 times more return on investment than Qomolangma Acquisition. However, ECB Bancorp is 1.4 times more volatile than Qomolangma Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. Qomolangma Acquisition Corp is currently generating about -0.23 per unit of risk. If you would invest  1,372  in ECB Bancorp on September 2, 2024 and sell it today you would earn a total of  127.00  from holding ECB Bancorp or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.31%
Values	Daily Returns

ECB Bancorp  vs.  Qomolangma Acquisition Corp

ECB Bancorp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ECB Bancorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental drivers, ECB Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Qomolangma Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qomolangma Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ECB Bancorp and Qomolangma Acquisition

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

The idea behind ECB Bancorp and Qomolangma Acquisition Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.