Correlation Between Beowulf Mining and EJF Investments
Can any of the company-specific risk be diversified away by investing in both Beowulf Mining and EJF Investments 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 Beowulf Mining and EJF Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beowulf Mining and EJF Investments, you can compare the effects of market volatilities on Beowulf Mining and EJF Investments 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 Beowulf Mining with a short position of EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beowulf Mining and EJF Investments.
Diversification Opportunities for Beowulf Mining and EJF Investments
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Beowulf and EJF is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Beowulf Mining and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments and Beowulf 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 Beowulf Mining are associated (or correlated) with EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Beowulf Mining i.e., Beowulf Mining and EJF Investments go up and down completely randomly.
Pair Corralation between Beowulf Mining and EJF Investments
Assuming the 90 days trading horizon Beowulf Mining is expected to generate 3.71 times more return on investment than EJF Investments. However, Beowulf Mining is 3.71 times more volatile than EJF Investments. It trades about 0.32 of its potential returns per unit of risk. EJF Investments is currently generating about 0.28 per unit of risk. If you would invest 1,250 in Beowulf Mining on October 20, 2024 and sell it today you would earn a total of 350.00 from holding Beowulf Mining or generate 28.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beowulf Mining vs. EJF Investments
Performance |
| Timeline |
| Beowulf Mining |
| EJF Investments |
Beowulf Mining and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beowulf Mining and EJF Investments
The main advantage of trading using opposite Beowulf Mining and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beowulf Mining position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| Beowulf Mining vs. Flutter Entertainment PLC | Beowulf Mining vs. Catalyst Media Group | Beowulf Mining vs. Westlake Chemical Corp | Beowulf Mining vs. Heavitree Brewery |
| EJF Investments vs. Southwest Airlines Co | EJF Investments vs. Chrysalis Investments | EJF Investments vs. Various Eateries PLC | EJF Investments vs. Tavistock Investments Plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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