Correlation Between Eastinco Mining and Spotify Technology

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Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Spotify Technology 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 Eastinco Mining and Spotify Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastinco Mining Exploration and Spotify Technology SA, you can compare the effects of market volatilities on Eastinco Mining and Spotify Technology 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 Eastinco Mining with a short position of Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Spotify Technology.

Diversification Opportunities for Eastinco Mining and Spotify Technology

EastincoSpotifyDiversified AwayEastincoSpotifyDiversified Away100%
0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Eastinco and Spotify is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify Technology and Eastinco Mining 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 Eastinco Mining Exploration are associated (or correlated) with Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Spotify Technology go up and down completely randomly.

Pair Corralation between Eastinco Mining and Spotify Technology

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 38.42 times more return on investment than Spotify Technology. However, Eastinco Mining is 38.42 times more volatile than Spotify Technology SA. It trades about 0.09 of its potential returns per unit of risk. Spotify Technology SA is currently generating about 0.14 per unit of risk. If you would invest  0.95  in Eastinco Mining Exploration on November 30, 2024 and sell it today you would earn a total of  5,249  from holding Eastinco Mining Exploration or generate 552531.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy89.96%
ValuesDaily Returns

Eastinco Mining Exploration  vs.  Spotify Technology SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15ATN 0SPT
       Timeline  
Eastinco Mining Expl 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Eastinco Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15JanFebFeb424446485052545658
Spotify Technology 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Spotify Technology SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Spotify Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFeb450500550600

Eastinco Mining and Spotify Technology Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.0-5.24-3.48-1.730.02931.743.535.337.138.92 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15ATN 0SPT
       Returns  

Pair Trading with Eastinco Mining and Spotify Technology

The main advantage of trading using opposite Eastinco Mining and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.
The idea behind Eastinco Mining Exploration and Spotify Technology SA 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.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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