Correlation Between Eastside Distilling and Aristocrat Group

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

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

Diversification Opportunities for Eastside Distilling and Aristocrat Group

0.74

Correlation Coefficient

Eastside Distilling  Aristocrat Group

Poor diversification

The 3 months correlation between Eastside and Aristocrat is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Aristocrat Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Group Corp and Eastside Distilling 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 Eastside Distilling are associated (or correlated) with Aristocrat Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Group Corp has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Aristocrat Group go up and down completely randomly.

Pair Corralation between Eastside Distilling and Aristocrat Group

Given the investment horizon of 90 days Eastside Distilling is expected to generate 2.21 times more return on investment than Aristocrat Group. However, Eastside Distilling is 2.21 times more volatile than Aristocrat Group Corp. It trades about 0.03 of its potential returns per unit of risk. Aristocrat Group Corp is currently generating about -0.15 per unit of risk. If you would invest  80.00  in Eastside Distilling on September 3, 2024 and sell it today you would lose (15.00) from holding Eastside Distilling or give up 18.75% of portfolio value over 90 days.

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

Eastside Distilling  vs.  Aristocrat Group Corp

Eastside Distilling

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eastside Distilling are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eastside Distilling unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aristocrat Group Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aristocrat Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Eastside Distilling and Aristocrat Group

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

The idea behind Eastside Distilling and Aristocrat Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.