Correlation Between Eagle Cold and Gigastorage Corp
Can any of the company-specific risk be diversified away by investing in both Eagle Cold and Gigastorage Corp 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 Eagle Cold and Gigastorage Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Cold Storage and Gigastorage Corp, you can compare the effects of market volatilities on Eagle Cold and Gigastorage Corp 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 Eagle Cold with a short position of Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Cold and Gigastorage Corp.
Diversification Opportunities for Eagle Cold and Gigastorage Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Gigastorage is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Cold Storage and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp and Eagle Cold 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 Eagle Cold Storage are associated (or correlated) with Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Eagle Cold i.e., Eagle Cold and Gigastorage Corp go up and down completely randomly.
Pair Corralation between Eagle Cold and Gigastorage Corp
Assuming the 90 days trading horizon Eagle Cold Storage is expected to generate 0.76 times more return on investment than Gigastorage Corp. However, Eagle Cold Storage is 1.31 times less risky than Gigastorage Corp. It trades about -0.03 of its potential returns per unit of risk. Gigastorage Corp is currently generating about -0.18 per unit of risk. If you would invest 3,015 in Eagle Cold Storage on September 5, 2024 and sell it today you would lose (35.00) from holding Eagle Cold Storage or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Cold Storage vs. Gigastorage Corp
Performance |
| Timeline |
| Eagle Cold Storage |
| Gigastorage Corp |
Eagle Cold and Gigastorage Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Cold and Gigastorage Corp
The main advantage of trading using opposite Eagle Cold and Gigastorage Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Cold position performs unexpectedly, Gigastorage Corp 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 Gigastorage Corp will offset losses from the drop in Gigastorage Corp's long position.| Eagle Cold vs. Uni President Enterprises Corp | Eagle Cold vs. Lien Hwa Industrial | Eagle Cold vs. Great Wall Enterprise | Eagle Cold vs. Standard Foods Corp |
| Gigastorage Corp vs. Taiwan Semiconductor Manufacturing | Gigastorage Corp vs. Yang Ming Marine | Gigastorage Corp vs. AU Optronics | Gigastorage Corp vs. Nan Ya Plastics |
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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