Correlation Between Eastinco Mining and CAP LEASE
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and CAP LEASE 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 CAP LEASE 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 CAP LEASE AVIATION, you can compare the effects of market volatilities on Eastinco Mining and CAP LEASE 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 CAP LEASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and CAP LEASE.
Diversification Opportunities for Eastinco Mining and CAP LEASE
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eastinco and CAP is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and CAP LEASE AVIATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAP LEASE AVIATION 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 CAP LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAP LEASE AVIATION has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and CAP LEASE go up and down completely randomly.
Pair Corralation between Eastinco Mining and CAP LEASE
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 89.54 times more return on investment than CAP LEASE. However, Eastinco Mining is 89.54 times more volatile than CAP LEASE AVIATION. It trades about 0.27 of its potential returns per unit of risk. CAP LEASE AVIATION is currently generating about -0.03 per unit of risk. If you would invest 8,500 in Eastinco Mining Exploration on October 11, 2024 and sell it today you would lose (3,800) from holding Eastinco Mining Exploration or give up 44.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.57% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. CAP LEASE AVIATION
Performance |
| Timeline |
| Eastinco Mining Expl |
| CAP LEASE AVIATION |
Eastinco Mining and CAP LEASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and CAP LEASE
The main advantage of trading using opposite Eastinco Mining and CAP LEASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, CAP LEASE 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 CAP LEASE will offset losses from the drop in CAP LEASE's long position.| Eastinco Mining vs. XLMedia PLC | Eastinco Mining vs. Universal Health Services | Eastinco Mining vs. Optima Health plc | Eastinco Mining vs. Cizzle Biotechnology Holdings |
| CAP LEASE vs. Allianz Technology Trust | CAP LEASE vs. Lundin Mining Corp | CAP LEASE vs. Learning Technologies Group | CAP LEASE vs. Celebrus Technologies 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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