Correlation Between Settlebank and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Settlebank and Eagon Industrial 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 Settlebank and Eagon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and Eagon Industrial Co, you can compare the effects of market volatilities on Settlebank and Eagon Industrial 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 Settlebank with a short position of Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and Eagon Industrial.
Diversification Opportunities for Settlebank and Eagon Industrial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Settlebank and Eagon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial and Settlebank 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 Settlebank are associated (or correlated) with Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Settlebank i.e., Settlebank and Eagon Industrial go up and down completely randomly.
Pair Corralation between Settlebank and Eagon Industrial
Assuming the 90 days trading horizon Settlebank is expected to under-perform the Eagon Industrial. In addition to that, Settlebank is 1.33 times more volatile than Eagon Industrial Co. It trades about -0.01 of its total potential returns per unit of risk. Eagon Industrial Co is currently generating about 0.0 per unit of volatility. If you would invest 622,788 in Eagon Industrial Co on November 8, 2024 and sell it today you would lose (67,788) from holding Eagon Industrial Co or give up 10.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Settlebank vs. Eagon Industrial Co
Performance |
| Timeline |
| Settlebank |
| Eagon Industrial |
Settlebank and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and Eagon Industrial
The main advantage of trading using opposite Settlebank and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Settlebank vs. DONGKUK TED METAL | Settlebank vs. Guyoung Technology Co | Settlebank vs. Daou Technology | Settlebank vs. Seers Technology |
| Eagon Industrial vs. Seers Technology | Eagon Industrial vs. Songwon Industrial Co | Eagon Industrial vs. ENF Technology Co | Eagon Industrial vs. Bosung Power Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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