Correlation Between Eastinco Mining and Associated British
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on Eastinco Mining and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Associated British.
Diversification Opportunities for Eastinco Mining and Associated British
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastinco and Associated is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Associated British go up and down completely randomly.
Pair Corralation between Eastinco Mining and Associated British
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 2.21 times more return on investment than Associated British. However, Eastinco Mining is 2.21 times more volatile than Associated British Foods. It trades about 0.33 of its potential returns per unit of risk. Associated British Foods is currently generating about -0.21 per unit of risk. If you would invest 4,550 in Eastinco Mining Exploration on October 25, 2024 and sell it today you would earn a total of 850.00 from holding Eastinco Mining Exploration or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Associated British Foods
Performance |
| Timeline |
| Eastinco Mining Expl |
| Associated British Foods |
Eastinco Mining and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Associated British
The main advantage of trading using opposite Eastinco Mining and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| Eastinco Mining vs. Sabre Insurance Group | Eastinco Mining vs. Compal Electronics GDR | Eastinco Mining vs. Metro Bank PLC | Eastinco Mining vs. Electronic Arts |
| Associated British vs. Summit Materials Cl | Associated British vs. GreenX Metals | Associated British vs. Empire Metals Limited | Associated British vs. Tata Steel Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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