Correlation Between Eastside Distilling and CHS
Can any of the company-specific risk be diversified away by investing in both Eastside Distilling and CHS 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 Eastside Distilling and CHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastside Distilling and CHS Inc CL, you can compare the effects of market volatilities on Eastside Distilling and CHS 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 Eastside Distilling with a short position of CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and CHS.
Diversification Opportunities for Eastside Distilling and CHS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastside and CHS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and CHS Inc CL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CL and Eastside Distilling 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 Eastside Distilling are associated (or correlated) with CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CL has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and CHS go up and down completely randomly.
Pair Corralation between Eastside Distilling and CHS
Given the investment horizon of 90 days Eastside Distilling is expected to generate 12.48 times more return on investment than CHS. However, Eastside Distilling is 12.48 times more volatile than CHS Inc CL. It trades about 0.12 of its potential returns per unit of risk. CHS Inc CL is currently generating about -0.2 per unit of risk. If you would invest 58.00 in Eastside Distilling on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Eastside Distilling or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastside Distilling vs. CHS Inc CL
Performance |
| Timeline |
| Eastside Distilling |
| CHS Inc CL |
Eastside Distilling and CHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastside Distilling and CHS
The main advantage of trading using opposite Eastside Distilling and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastside Distilling position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS's long position.| Eastside Distilling vs. Brown Forman | Eastside Distilling vs. Duckhorn Portfolio | Eastside Distilling vs. Brown Forman | Eastside Distilling vs. Constellation Brands Class |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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