Correlation Between SQUIRREL MEDIA and Eaton PLC
Can any of the company-specific risk be diversified away by investing in both SQUIRREL MEDIA and Eaton PLC 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 SQUIRREL MEDIA and Eaton PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SQUIRREL MEDIA SA and Eaton PLC, you can compare the effects of market volatilities on SQUIRREL MEDIA and Eaton PLC 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 SQUIRREL MEDIA with a short position of Eaton PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SQUIRREL MEDIA and Eaton PLC.
Diversification Opportunities for SQUIRREL MEDIA and Eaton PLC
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SQUIRREL and Eaton is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SQUIRREL MEDIA SA and Eaton PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton PLC and SQUIRREL MEDIA 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 SQUIRREL MEDIA SA are associated (or correlated) with Eaton PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton PLC has no effect on the direction of SQUIRREL MEDIA i.e., SQUIRREL MEDIA and Eaton PLC go up and down completely randomly.
Pair Corralation between SQUIRREL MEDIA and Eaton PLC
Assuming the 90 days horizon SQUIRREL MEDIA SA is expected to generate 0.73 times more return on investment than Eaton PLC. However, SQUIRREL MEDIA SA is 1.38 times less risky than Eaton PLC. It trades about 0.24 of its potential returns per unit of risk. Eaton PLC is currently generating about -0.1 per unit of risk. If you would invest 122.00 in SQUIRREL MEDIA SA on November 5, 2024 and sell it today you would earn a total of 17.00 from holding SQUIRREL MEDIA SA or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SQUIRREL MEDIA SA vs. Eaton PLC
Performance |
| Timeline |
| SQUIRREL MEDIA SA |
| Eaton PLC |
SQUIRREL MEDIA and Eaton PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SQUIRREL MEDIA and Eaton PLC
The main advantage of trading using opposite SQUIRREL MEDIA and Eaton PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SQUIRREL MEDIA position performs unexpectedly, Eaton PLC 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 Eaton PLC will offset losses from the drop in Eaton PLC's long position.| SQUIRREL MEDIA vs. British American Tobacco | SQUIRREL MEDIA vs. ePlay Digital | SQUIRREL MEDIA vs. PLAY2CHILL SA ZY | SQUIRREL MEDIA vs. LG Display Co |
| Eaton PLC vs. Apollo Investment Corp | Eaton PLC vs. Keck Seng Investments | Eaton PLC vs. SOUTHWEST AIRLINES | Eaton PLC vs. ECHO INVESTMENT ZY |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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