Correlation Between DO Home and Eastern Air
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By analyzing existing cross correlation between DO Home Collection and Eastern Air Logistics, you can compare the effects of market volatilities on DO Home and Eastern Air 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 DO Home with a short position of Eastern Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of DO Home and Eastern Air.
Diversification Opportunities for DO Home and Eastern Air
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between 002798 and Eastern is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DO Home Collection and Eastern Air Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Air Logistics and DO Home 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 DO Home Collection are associated (or correlated) with Eastern Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Air Logistics has no effect on the direction of DO Home i.e., DO Home and Eastern Air go up and down completely randomly.
Pair Corralation between DO Home and Eastern Air
Assuming the 90 days trading horizon DO Home Collection is expected to generate 0.7 times more return on investment than Eastern Air. However, DO Home Collection is 1.42 times less risky than Eastern Air. It trades about 0.08 of its potential returns per unit of risk. Eastern Air Logistics is currently generating about -0.16 per unit of risk. If you would invest 364.00 in DO Home Collection on November 8, 2024 and sell it today you would earn a total of 11.00 from holding DO Home Collection or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DO Home Collection vs. Eastern Air Logistics
Performance |
| Timeline |
| DO Home Collection |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eastern Air Logistics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DO Home and Eastern Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DO Home and Eastern Air
The main advantage of trading using opposite DO Home and Eastern Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DO Home position performs unexpectedly, Eastern Air 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 Eastern Air will offset losses from the drop in Eastern Air's long position.The idea behind DO Home Collection and Eastern Air Logistics 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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