Correlation Between Eastinco Mining and LBG Media
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and LBG Media 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 LBG Media 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 LBG Media PLC, you can compare the effects of market volatilities on Eastinco Mining and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and LBG Media.
Diversification Opportunities for Eastinco Mining and LBG Media
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastinco and LBG is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and LBG Media go up and down completely randomly.
Pair Corralation between Eastinco Mining and LBG Media
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 0.59 times more return on investment than LBG Media. However, Eastinco Mining Exploration is 1.71 times less risky than LBG Media. It trades about -0.11 of its potential returns per unit of risk. LBG Media PLC is currently generating about -0.21 per unit of risk. If you would invest 5,400 in Eastinco Mining Exploration on December 7, 2024 and sell it today you would lose (250.00) from holding Eastinco Mining Exploration or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. LBG Media PLC
Performance |
| Timeline |
| Eastinco Mining Expl |
| LBG Media PLC |
Eastinco Mining and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and LBG Media
The main advantage of trading using opposite Eastinco Mining and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Eastinco Mining vs. Beeks Trading | Eastinco Mining vs. Chrysalis Investments | Eastinco Mining vs. EJF Investments | Eastinco Mining vs. FC Investment Trust |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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