Correlation Between Eastinco Mining and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Premier Foods 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 Premier Foods 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 Premier Foods PLC, you can compare the effects of market volatilities on Eastinco Mining and Premier Foods 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Premier Foods.
Diversification Opportunities for Eastinco Mining and Premier Foods
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastinco and Premier is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Premier Foods go up and down completely randomly.
Pair Corralation between Eastinco Mining and Premier Foods
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 212.44 times more return on investment than Premier Foods. However, Eastinco Mining is 212.44 times more volatile than Premier Foods PLC. It trades about 0.27 of its potential returns per unit of risk. Premier Foods PLC is currently generating about 0.09 per unit of risk. If you would invest 8,750 in Eastinco Mining Exploration on September 24, 2024 and sell it today you would lose (4,200) from holding Eastinco Mining Exploration or give up 48.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Premier Foods PLC
Performance |
| Timeline |
| Eastinco Mining Expl |
| Premier Foods PLC |
Eastinco Mining and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Premier Foods
The main advantage of trading using opposite Eastinco Mining and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Eastinco Mining vs. Givaudan SA | Eastinco Mining vs. Antofagasta PLC | Eastinco Mining vs. Ferrexpo PLC | Eastinco Mining vs. Atalaya Mining |
| Premier Foods vs. Coeur Mining | Premier Foods vs. Eastinco Mining Exploration | Premier Foods vs. European Metals Holdings | Premier Foods vs. Wheaton Precious Metals |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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