Correlation Between Emeren and Recon Technology

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

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

Diversification Opportunities for Emeren and Recon Technology

0.63

Correlation Coefficient

Emeren  Recon Technology

Poor diversification

The 3 months correlation between Emeren and Recon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Emeren Group and Recon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recon Technology and Emeren 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 Emeren Group are associated (or correlated) with Recon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recon Technology has no effect on the direction of Emeren i.e., Emeren and Recon Technology go up and down completely randomly.

Pair Corralation between Emeren and Recon Technology

Considering the 90-day investment horizon Emeren Group is expected to generate 0.24 times more return on investment than Recon Technology. However, Emeren Group is 4.1 times less risky than Recon Technology. It trades about -0.12 of its potential returns per unit of risk. Recon Technology is currently generating about -0.14 per unit of risk. If you would invest  189.00  in Emeren Group on September 6, 2025 and sell it today you would lose (14.00) from holding Emeren Group or give up 7.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Emeren Group  vs.  Recon Technology

Emeren Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Emeren Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Recon Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Recon Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2026. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Emeren and Recon Technology

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

The idea behind Emeren Group and Recon Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.