Correlation Between Eastinco Mining and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Cairn Homes 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 Cairn Homes 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 Cairn Homes PLC, you can compare the effects of market volatilities on Eastinco Mining and Cairn Homes 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 Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Cairn Homes.
Diversification Opportunities for Eastinco Mining and Cairn Homes
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastinco and Cairn is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC 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 Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Cairn Homes go up and down completely randomly.
Pair Corralation between Eastinco Mining and Cairn Homes
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 1.71 times more return on investment than Cairn Homes. However, Eastinco Mining is 1.71 times more volatile than Cairn Homes PLC. It trades about 0.34 of its potential returns per unit of risk. Cairn Homes PLC is currently generating about -0.32 per unit of risk. If you would invest 4,550 in Eastinco Mining Exploration on October 21, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Cairn Homes PLC
Performance |
| Timeline |
| Eastinco Mining Expl |
| Cairn Homes PLC |
Eastinco Mining and Cairn Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Cairn Homes
The main advantage of trading using opposite Eastinco Mining and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' long position.| Eastinco Mining vs. Thor Mining PLC | Eastinco Mining vs. Lundin Mining Corp | Eastinco Mining vs. McEwen Mining | Eastinco Mining vs. Invesco Physical Silver |
| Cairn Homes vs. Ecofin Global Utilities | Cairn Homes vs. BE Semiconductor Industries | Cairn Homes vs. Leroy Seafood Group | Cairn Homes vs. Aeorema Communications 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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