Correlation Between BANK HANDLOWY and EBay
Can any of the company-specific risk be diversified away by investing in both BANK HANDLOWY 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 BANK HANDLOWY and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK HANDLOWY and eBay Inc, you can compare the effects of market volatilities on BANK HANDLOWY 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 BANK HANDLOWY with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and EBay.
Diversification Opportunities for BANK HANDLOWY and EBay
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and EBay is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and BANK HANDLOWY 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 BANK HANDLOWY 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 BANK HANDLOWY i.e., BANK HANDLOWY and EBay go up and down completely randomly.
Pair Corralation between BANK HANDLOWY and EBay
Assuming the 90 days trading horizon BANK HANDLOWY is expected to generate 2.92 times more return on investment than EBay. However, BANK HANDLOWY is 2.92 times more volatile than eBay Inc. It trades about 0.08 of its potential returns per unit of risk. eBay Inc is currently generating about 0.06 per unit of risk. If you would invest 465.00 in BANK HANDLOWY on August 28, 2024 and sell it today you would earn a total of 1,565 from holding BANK HANDLOWY or generate 336.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK HANDLOWY vs. eBay Inc
Performance |
| Timeline |
| BANK HANDLOWY |
| eBay Inc |
BANK HANDLOWY and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK HANDLOWY and EBay
The main advantage of trading using opposite BANK HANDLOWY and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK HANDLOWY 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.| BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Apple Inc | BANK HANDLOWY vs. Microsoft | BANK HANDLOWY vs. Microsoft |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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