Correlation Between EPlay Digital and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both EPlay Digital and IMPERIAL TOBACCO 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 EPlay Digital and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ePlay Digital and IMPERIAL TOBACCO , you can compare the effects of market volatilities on EPlay Digital and IMPERIAL TOBACCO 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 EPlay Digital with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPlay Digital and IMPERIAL TOBACCO.
Diversification Opportunities for EPlay Digital and IMPERIAL TOBACCO
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPlay and IMPERIAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ePlay Digital and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO and EPlay Digital 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 ePlay Digital are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of EPlay Digital i.e., EPlay Digital and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between EPlay Digital and IMPERIAL TOBACCO
Assuming the 90 days trading horizon ePlay Digital is expected to generate 82.21 times more return on investment than IMPERIAL TOBACCO. However, EPlay Digital is 82.21 times more volatile than IMPERIAL TOBACCO . It trades about 0.09 of its potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.24 per unit of risk. If you would invest 0.10 in ePlay Digital on September 1, 2024 and sell it today you would earn a total of 0.00 from holding ePlay Digital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ePlay Digital vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| ePlay Digital |
| IMPERIAL TOBACCO |
EPlay Digital and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPlay Digital and IMPERIAL TOBACCO
The main advantage of trading using opposite EPlay Digital and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPlay Digital position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| EPlay Digital vs. Apple Inc | EPlay Digital vs. Apple Inc | EPlay Digital vs. Apple Inc | EPlay Digital vs. Apple Inc |
| IMPERIAL TOBACCO vs. INDOFOOD AGRI RES | IMPERIAL TOBACCO vs. AUSTEVOLL SEAFOOD | IMPERIAL TOBACCO vs. CAL MAINE FOODS | IMPERIAL TOBACCO vs. SALESFORCE INC CDR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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