Correlation Between EAT WELL and Abbott Laboratories

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

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

Diversification Opportunities for EAT WELL and Abbott Laboratories

0.0

Correlation Coefficient

EAT WELL  Abbott Laboratories

Pay attention - limited upside

The 3 months correlation between EAT and Abbott is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EAT WELL INVESTMENT and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories and EAT WELL 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 EAT WELL INVESTMENT are associated (or correlated) with Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of EAT WELL i.e., EAT WELL and Abbott Laboratories go up and down completely randomly.

Pair Corralation between EAT WELL and Abbott Laboratories

If you would invest  10,024  in Abbott Laboratories on September 28, 2024 and sell it today you would earn a total of  862.00  from holding Abbott Laboratories or generate 8.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EAT WELL INVESTMENT  vs.  Abbott Laboratories

EAT WELL INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAT WELL INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, EAT WELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Abbott Laboratories

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abbott Laboratories are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Abbott Laboratories may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with EAT WELL and Abbott Laboratories

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

The idea behind EAT WELL INVESTMENT and Abbott Laboratories 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.