Correlation Between Eastinco Mining and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Eastinco Mining and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Fevertree Drinks.
Diversification Opportunities for Eastinco Mining and Fevertree Drinks
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastinco and Fevertree is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Eastinco Mining and Fevertree Drinks
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 1.44 times more return on investment than Fevertree Drinks. However, Eastinco Mining is 1.44 times more volatile than Fevertree Drinks Plc. It trades about 0.07 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.11 per unit of risk. If you would invest 5,100 in Eastinco Mining Exploration on October 30, 2024 and sell it today you would earn a total of 300.00 from holding Eastinco Mining Exploration or generate 5.88% 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. Fevertree Drinks Plc
Performance |
| Timeline |
| Eastinco Mining Expl |
| Fevertree Drinks Plc |
Eastinco Mining and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Fevertree Drinks
The main advantage of trading using opposite Eastinco Mining and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Eastinco Mining vs. Hollywood Bowl Group | Eastinco Mining vs. Molson Coors Beverage | Eastinco Mining vs. Zinc Media Group | Eastinco Mining vs. Ebro Foods |
| Fevertree Drinks vs. China Pacific Insurance | Fevertree Drinks vs. Sabre Insurance Group | Fevertree Drinks vs. Aptitude Software Group | Fevertree Drinks vs. UNIQA Insurance Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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