Correlation Between QUEEN S and EBay
Can any of the company-specific risk be diversified away by investing in both QUEEN S and EBay 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 QUEEN S and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QUEEN S ROAD and eBay Inc, you can compare the effects of market volatilities on QUEEN S and EBay 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 QUEEN S with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and EBay.
Diversification Opportunities for QUEEN S and EBay
Modest diversification
The 3 months correlation between QUEEN and EBay is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of QUEEN S i.e., QUEEN S and EBay go up and down completely randomly.
Pair Corralation between QUEEN S and EBay
Assuming the 90 days horizon QUEEN S is expected to generate 1.31 times less return on investment than EBay. In addition to that, QUEEN S is 1.87 times more volatile than eBay Inc. It trades about 0.13 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.31 per unit of volatility. If you would invest 5,472 in eBay Inc on September 5, 2024 and sell it today you would earn a total of 535.00 from holding eBay Inc or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
QUEEN S ROAD vs. eBay Inc
Performance |
| Timeline |
| QUEEN S ROAD |
| eBay Inc |
QUEEN S and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QUEEN S and EBay
The main advantage of trading using opposite QUEEN S and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| QUEEN S vs. Blackstone Group | QUEEN S vs. BlackRock | QUEEN S vs. The Bank of | QUEEN S vs. Ameriprise Financial |
| EBay vs. BURLINGTON STORES | EBay vs. Strategic Investments AS | EBay vs. Virtus Investment Partners | EBay vs. Burlington Stores |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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