Correlation Between East Side and Western Investment
Can any of the company-specific risk be diversified away by investing in both East Side and Western Investment 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 East Side and Western Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Side Games and Western Investment, you can compare the effects of market volatilities on East Side and Western Investment 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 East Side with a short position of Western Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and Western Investment.
Diversification Opportunities for East Side and Western Investment
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between East and Western is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games and Western Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Investment and East Side 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 East Side Games are associated (or correlated) with Western Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Investment has no effect on the direction of East Side i.e., East Side and Western Investment go up and down completely randomly.
Pair Corralation between East Side and Western Investment
Assuming the 90 days trading horizon East Side Games is expected to generate 1.36 times more return on investment than Western Investment. However, East Side is 1.36 times more volatile than Western Investment. It trades about 0.03 of its potential returns per unit of risk. Western Investment is currently generating about 0.04 per unit of risk. If you would invest 56.00 in East Side Games on September 15, 2024 and sell it today you would earn a total of 4.00 from holding East Side Games or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Side Games vs. Western Investment
Performance |
| Timeline |
| East Side Games |
| Western Investment |
East Side and Western Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Side and Western Investment
The main advantage of trading using opposite East Side and Western Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Side position performs unexpectedly, Western Investment 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 Western Investment will offset losses from the drop in Western Investment's long position.| East Side vs. Sangoma Technologies Corp | East Side vs. Vitalhub Corp | East Side vs. Propel Holdings | East Side vs. D2L Inc |
| Western Investment vs. Berkshire Hathaway CDR | Western Investment vs. E L Financial Corp | Western Investment vs. E L Financial 3 | Western Investment vs. Molson Coors Canada |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |