Correlation Between Eastside Distilling and Splash Beverage
Can any of the company-specific risk be diversified away by investing in both Eastside Distilling and Splash Beverage 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 Splash Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastside Distilling and Splash Beverage Group, you can compare the effects of market volatilities on Eastside Distilling and Splash Beverage 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 Splash Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastside Distilling and Splash Beverage.
Diversification Opportunities for Eastside Distilling and Splash Beverage
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastside and Splash is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Splash Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Splash Beverage Group 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 Splash Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Splash Beverage Group has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Splash Beverage go up and down completely randomly.
Pair Corralation between Eastside Distilling and Splash Beverage
Given the investment horizon of 90 days Eastside Distilling is expected to under-perform the Splash Beverage. In addition to that, Eastside Distilling is 1.0 times more volatile than Splash Beverage Group. It trades about -0.03 of its total potential returns per unit of risk. Splash Beverage Group is currently generating about -0.02 per unit of volatility. If you would invest 21.00 in Splash Beverage Group on August 27, 2024 and sell it today you would lose (1.00) from holding Splash Beverage Group or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastside Distilling vs. Splash Beverage Group
Performance |
| Timeline |
| Eastside Distilling |
| Splash Beverage Group |
Eastside Distilling and Splash Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastside Distilling and Splash Beverage
The main advantage of trading using opposite Eastside Distilling and Splash Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastside Distilling position performs unexpectedly, Splash Beverage 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 Splash Beverage will offset losses from the drop in Splash Beverage's long position.| Eastside Distilling vs. Naked Wines plc | Eastside Distilling vs. Andrew Peller Limited | Eastside Distilling vs. Iconic Brands | Eastside Distilling vs. Naked Wines plc |
| Splash Beverage vs. Andrew Peller Limited | Splash Beverage vs. Naked Wines plc | Splash Beverage vs. Willamette Valley Vineyards | Splash Beverage vs. Naked Wines plc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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