Correlation Between Eastinco Mining and Fonix Mobile
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Fonix Mobile 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 Fonix Mobile 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 Fonix Mobile plc, you can compare the effects of market volatilities on Eastinco Mining and Fonix Mobile 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 Fonix Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Fonix Mobile.
Diversification Opportunities for Eastinco Mining and Fonix Mobile
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eastinco and Fonix is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Fonix Mobile plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonix Mobile 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 Fonix Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonix Mobile plc has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Fonix Mobile go up and down completely randomly.
Pair Corralation between Eastinco Mining and Fonix Mobile
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 0.3 times more return on investment than Fonix Mobile. However, Eastinco Mining Exploration is 3.31 times less risky than Fonix Mobile. It trades about 0.37 of its potential returns per unit of risk. Fonix Mobile plc is currently generating about -0.26 per unit of risk. If you would invest 4,900 in Eastinco Mining Exploration on September 3, 2024 and sell it today you would earn a total of 200.00 from holding Eastinco Mining Exploration or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Fonix Mobile plc
Performance |
| Timeline |
| Eastinco Mining Expl |
| Fonix Mobile plc |
Eastinco Mining and Fonix Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Fonix Mobile
The main advantage of trading using opposite Eastinco Mining and Fonix Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Fonix Mobile 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 Fonix Mobile will offset losses from the drop in Fonix Mobile's long position.The idea behind Eastinco Mining Exploration and Fonix Mobile plc 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.| Fonix Mobile vs. Samsung Electronics Co | Fonix Mobile vs. Samsung Electronics Co | Fonix Mobile vs. Hyundai Motor | Fonix Mobile vs. Toyota Motor Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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