Correlation Between Eastinco Mining and Virgin Wines
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Virgin Wines 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 Virgin Wines 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 Virgin Wines UK, you can compare the effects of market volatilities on Eastinco Mining and Virgin Wines 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 Virgin Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Virgin Wines.
Diversification Opportunities for Eastinco Mining and Virgin Wines
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eastinco and Virgin is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Virgin Wines UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Wines UK 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 Virgin Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Wines UK has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Virgin Wines go up and down completely randomly.
Pair Corralation between Eastinco Mining and Virgin Wines
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 118.15 times more return on investment than Virgin Wines. However, Eastinco Mining is 118.15 times more volatile than Virgin Wines UK. It trades about 0.27 of its potential returns per unit of risk. Virgin Wines UK is currently generating about -0.03 per unit of risk. If you would invest 8,500 in Eastinco Mining Exploration on October 11, 2024 and sell it today you would lose (3,800) from holding Eastinco Mining Exploration or give up 44.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Virgin Wines UK
Performance |
| Timeline |
| Eastinco Mining Expl |
| Virgin Wines UK |
Eastinco Mining and Virgin Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Virgin Wines
The main advantage of trading using opposite Eastinco Mining and Virgin Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining position performs unexpectedly, Virgin Wines 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 Virgin Wines will offset losses from the drop in Virgin Wines' long position.| Eastinco Mining vs. Flow Traders NV | Eastinco Mining vs. Lindsell Train Investment | Eastinco Mining vs. Take Two Interactive Software | Eastinco Mining vs. Evolution Gaming Group |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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