Correlation Between Tombador Iron and EP Financial

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

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

Diversification Opportunities for Tombador Iron and EP Financial

0.0

Correlation Coefficient

Tombador Iron  EP Financial

Pay attention - limited upside

The 3 months correlation between Tombador and EP1 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tombador Iron and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Tombador Iron 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 Tombador Iron are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Tombador Iron i.e., Tombador Iron and EP Financial go up and down completely randomly.

Pair Corralation between Tombador Iron and EP Financial

If you would invest  41.00  in EP Financial Group on September 20, 2024 and sell it today you would earn a total of  8.00  from holding EP Financial Group or generate 19.51% return on investment over 90 days.

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

Tombador Iron  vs.  EP Financial Group

Tombador Iron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tombador Iron has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tombador Iron is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

EP Financial Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EP Financial Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EP Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tombador Iron and EP Financial

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

The idea behind Tombador Iron and EP Financial Group 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.