Correlation Between Eastern and 632525BC4

Can any of the company-specific risk be diversified away by investing in both Eastern and 632525BC4 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 Eastern and 632525BC4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastern Co and NAB 6429 12 JAN 33, you can compare the effects of market volatilities on Eastern and 632525BC4 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 Eastern with a short position of 632525BC4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and 632525BC4.

Diversification Opportunities for Eastern and 632525BC4

0.04

Correlation Coefficient

Eastern  632525BC4

Significant diversification

The 3 months correlation between Eastern and 632525BC4 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and NAB 6429 12 JAN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAB 6429 12 and Eastern 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 Eastern Co are associated (or correlated) with 632525BC4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAB 6429 12 has no effect on the direction of Eastern i.e., Eastern and 632525BC4 go up and down completely randomly.

Pair Corralation between Eastern and 632525BC4

Considering the 90-day investment horizon Eastern Co is expected to under-perform the 632525BC4. In addition to that, Eastern is 1.67 times more volatile than NAB 6429 12 JAN 33. It trades about -0.1 of its total potential returns per unit of risk. NAB 6429 12 JAN 33 is currently generating about -0.13 per unit of volatility. If you would invest  10,906  in NAB 6429 12 JAN 33 on September 26, 2024 and sell it today you would lose (775.00) from holding NAB 6429 12 JAN 33 or give up 7.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.73%
Values	Daily Returns

Eastern Co  vs.  NAB 6429 12 JAN 33

Eastern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

NAB 6429 12

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAB 6429 12 JAN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NAB 6429 12 JAN 33 investors.

Pair Trading with Eastern and 632525BC4

The main advantage of trading using opposite Eastern and 632525BC4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, 632525BC4 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 632525BC4 will offset losses from the drop in 632525BC4's long position.

The idea behind Eastern Co and NAB 6429 12 JAN 33 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.