Correlation Between Strategic Investments and EBay
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and EBay 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 Strategic Investments and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and eBay Inc, you can compare the effects of market volatilities on Strategic Investments and EBay 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 Strategic Investments with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and EBay.
Diversification Opportunities for Strategic Investments and EBay
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and EBay is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Strategic Investments i.e., Strategic Investments and EBay go up and down completely randomly.
Pair Corralation between Strategic Investments and EBay
Assuming the 90 days horizon Strategic Investments is expected to generate 8.32 times less return on investment than EBay. In addition to that, Strategic Investments is 2.38 times more volatile than eBay Inc. It trades about 0.02 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.31 per unit of volatility. If you would invest 5,472 in eBay Inc on September 5, 2024 and sell it today you would earn a total of 535.00 from holding eBay Inc or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Strategic Investments AS vs. eBay Inc
Performance |
| Timeline |
| Strategic Investments |
| eBay Inc |
Strategic Investments and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and EBay
The main advantage of trading using opposite Strategic Investments and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| Strategic Investments vs. Blackstone Group | Strategic Investments vs. BlackRock | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial |
| EBay vs. BURLINGTON STORES | EBay vs. Strategic Investments AS | EBay vs. Virtus Investment Partners | EBay vs. Burlington Stores |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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