Correlation Between Borealis Foods and Eastside Distilling
Can any of the company-specific risk be diversified away by investing in both Borealis Foods and Eastside Distilling 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 Borealis Foods and Eastside Distilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borealis Foods and Eastside Distilling, you can compare the effects of market volatilities on Borealis Foods and Eastside Distilling 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 Borealis Foods with a short position of Eastside Distilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borealis Foods and Eastside Distilling.
Diversification Opportunities for Borealis Foods and Eastside Distilling
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Borealis and Eastside is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Borealis Foods and Eastside Distilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastside Distilling and Borealis Foods 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 Borealis Foods are associated (or correlated) with Eastside Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastside Distilling has no effect on the direction of Borealis Foods i.e., Borealis Foods and Eastside Distilling go up and down completely randomly.
Pair Corralation between Borealis Foods and Eastside Distilling
Assuming the 90 days horizon Borealis Foods is expected to generate 1.39 times less return on investment than Eastside Distilling. But when comparing it to its historical volatility, Borealis Foods is 2.02 times less risky than Eastside Distilling. It trades about 0.03 of its potential returns per unit of risk. Eastside Distilling is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Eastside Distilling on August 30, 2024 and sell it today you would lose (18.00) from holding Eastside Distilling or give up 21.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Borealis Foods vs. Eastside Distilling
Performance |
| Timeline |
| Borealis Foods |
| Eastside Distilling |
Borealis Foods and Eastside Distilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borealis Foods and Eastside Distilling
The main advantage of trading using opposite Borealis Foods and Eastside Distilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borealis Foods position performs unexpectedly, Eastside Distilling 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 Eastside Distilling will offset losses from the drop in Eastside Distilling's long position.| Borealis Foods vs. Grocery Outlet Holding | Borealis Foods vs. Simon Property Group | Borealis Foods vs. Amgen Inc | Borealis Foods vs. Cedar Realty Trust |
| Eastside Distilling vs. Iconic Brands | Eastside Distilling vs. Andrew Peller Limited | Eastside Distilling vs. Splash Beverage Group | Eastside Distilling vs. Fresh Grapes LLC |
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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