Correlation Between Bridgestone and EAST SIDE
Can any of the company-specific risk be diversified away by investing in both Bridgestone and EAST SIDE 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 Bridgestone and EAST SIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgestone and EAST SIDE GAMES, you can compare the effects of market volatilities on Bridgestone and EAST SIDE 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 Bridgestone with a short position of EAST SIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone and EAST SIDE.
Diversification Opportunities for Bridgestone and EAST SIDE
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bridgestone and EAST is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone and EAST SIDE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST SIDE GAMES and Bridgestone 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 Bridgestone are associated (or correlated) with EAST SIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST SIDE GAMES has no effect on the direction of Bridgestone i.e., Bridgestone and EAST SIDE go up and down completely randomly.
Pair Corralation between Bridgestone and EAST SIDE
Assuming the 90 days trading horizon Bridgestone is expected to generate 0.16 times more return on investment than EAST SIDE. However, Bridgestone is 6.39 times less risky than EAST SIDE. It trades about -0.1 of its potential returns per unit of risk. EAST SIDE GAMES is currently generating about -0.11 per unit of risk. If you would invest 1,640 in Bridgestone on September 13, 2024 and sell it today you would lose (40.00) from holding Bridgestone or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgestone vs. EAST SIDE GAMES
Performance |
| Timeline |
| Bridgestone |
| EAST SIDE GAMES |
Bridgestone and EAST SIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone and EAST SIDE
The main advantage of trading using opposite Bridgestone and EAST SIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone position performs unexpectedly, EAST SIDE 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 EAST SIDE will offset losses from the drop in EAST SIDE's long position.| Bridgestone vs. Highlight Communications AG | Bridgestone vs. Tower One Wireless | Bridgestone vs. NEWELL RUBBERMAID | Bridgestone vs. Consolidated Communications Holdings |
| EAST SIDE vs. NEXON Co | EAST SIDE vs. Take Two Interactive Software | EAST SIDE vs. Superior Plus Corp | EAST SIDE vs. SIVERS SEMICONDUCTORS AB |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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