Correlation Between Eyebright Medical and East Money
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By analyzing existing cross correlation between Eyebright Medical Technology and East Money Information, you can compare the effects of market volatilities on Eyebright Medical and East Money 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 Eyebright Medical with a short position of East Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eyebright Medical and East Money.
Diversification Opportunities for Eyebright Medical and East Money
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eyebright and East is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eyebright Medical Technology and East Money Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Money Information and Eyebright Medical 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 Eyebright Medical Technology are associated (or correlated) with East Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Money Information has no effect on the direction of Eyebright Medical i.e., Eyebright Medical and East Money go up and down completely randomly.
Pair Corralation between Eyebright Medical and East Money
Assuming the 90 days trading horizon Eyebright Medical Technology is expected to under-perform the East Money. But the stock apears to be less risky and, when comparing its historical volatility, Eyebright Medical Technology is 1.23 times less risky than East Money. The stock trades about -0.08 of its potential returns per unit of risk. The East Money Information is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,254 in East Money Information on November 7, 2024 and sell it today you would earn a total of 40.00 from holding East Money Information or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eyebright Medical Technology vs. East Money Information
Performance |
| Timeline |
| Eyebright Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| East Money Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eyebright Medical and East Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eyebright Medical and East Money
The main advantage of trading using opposite Eyebright Medical and East Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eyebright Medical position performs unexpectedly, East Money 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 East Money will offset losses from the drop in East Money's long position.The idea behind Eyebright Medical Technology and East Money Information 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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