Correlation Between Aristocrat Group and Eastside Distilling
Can any of the company-specific risk be diversified away by investing in both Aristocrat Group and Eastside Distilling 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 Aristocrat Group and Eastside Distilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Group Corp and Eastside Distilling, you can compare the effects of market volatilities on Aristocrat Group and Eastside Distilling 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 Aristocrat Group with a short position of Eastside Distilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Group and Eastside Distilling.
Diversification Opportunities for Aristocrat Group and Eastside Distilling
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aristocrat and Eastside is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Group Corp and Eastside Distilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastside Distilling and Aristocrat Group 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 Aristocrat Group Corp are associated (or correlated) with Eastside Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastside Distilling has no effect on the direction of Aristocrat Group i.e., Aristocrat Group and Eastside Distilling go up and down completely randomly.
Pair Corralation between Aristocrat Group and Eastside Distilling
Given the investment horizon of 90 days Aristocrat Group Corp is expected to under-perform the Eastside Distilling. In addition to that, Aristocrat Group is 1.25 times more volatile than Eastside Distilling. It trades about -0.15 of its total potential returns per unit of risk. Eastside Distilling is currently generating about 0.01 per unit of volatility. If you would invest 61.00 in Eastside Distilling on August 28, 2024 and sell it today you would lose (1.00) from holding Eastside Distilling or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Group Corp vs. Eastside Distilling
Performance |
| Timeline |
| Aristocrat Group Corp |
| Eastside Distilling |
Aristocrat Group and Eastside Distilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Group and Eastside Distilling
The main advantage of trading using opposite Aristocrat Group and Eastside Distilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Group position performs unexpectedly, Eastside Distilling 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 Eastside Distilling will offset losses from the drop in Eastside Distilling's long position.| Aristocrat Group vs. Embotelladora Andina SA | Aristocrat Group vs. Signet International Holdings | Aristocrat Group vs. National Beverage Corp | Aristocrat Group vs. PT Astra International |
| Eastside Distilling vs. Naked Wines plc | Eastside Distilling vs. Andrew Peller Limited | Eastside Distilling vs. Iconic Brands | Eastside Distilling vs. Naked Wines plc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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