Correlation Between Eagle Cold and GAME HOURS
Can any of the company-specific risk be diversified away by investing in both Eagle Cold and GAME HOURS 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 GAME HOURS 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 GAME HOURS, you can compare the effects of market volatilities on Eagle Cold and GAME HOURS 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 GAME HOURS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Cold and GAME HOURS.
Diversification Opportunities for Eagle Cold and GAME HOURS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and GAME is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Cold Storage and GAME HOURS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAME HOURS 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 GAME HOURS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAME HOURS has no effect on the direction of Eagle Cold i.e., Eagle Cold and GAME HOURS go up and down completely randomly.
Pair Corralation between Eagle Cold and GAME HOURS
Assuming the 90 days trading horizon Eagle Cold Storage is expected to generate 0.27 times more return on investment than GAME HOURS. However, Eagle Cold Storage is 3.64 times less risky than GAME HOURS. It trades about 0.08 of its potential returns per unit of risk. GAME HOURS is currently generating about -0.01 per unit of risk. If you would invest 1,965 in Eagle Cold Storage on September 5, 2024 and sell it today you would earn a total of 1,015 from holding Eagle Cold Storage or generate 51.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Cold Storage vs. GAME HOURS
Performance |
| Timeline |
| Eagle Cold Storage |
| GAME HOURS |
Eagle Cold and GAME HOURS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Cold and GAME HOURS
The main advantage of trading using opposite Eagle Cold and GAME HOURS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Cold position performs unexpectedly, GAME HOURS 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 GAME HOURS will offset losses from the drop in GAME HOURS'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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