Correlation Between Eat Beyond and Alliance Global
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and Alliance Global 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 Eat Beyond and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eat Beyond Global and Alliance Global Group, you can compare the effects of market volatilities on Eat Beyond and Alliance Global 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 Eat Beyond with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and Alliance Global.
Diversification Opportunities for Eat Beyond and Alliance Global
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eat and Alliance is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and Eat Beyond 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 Eat Beyond Global are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Eat Beyond i.e., Eat Beyond and Alliance Global go up and down completely randomly.
Pair Corralation between Eat Beyond and Alliance Global
Assuming the 90 days horizon Eat Beyond Global is expected to generate 32.51 times more return on investment than Alliance Global. However, Eat Beyond is 32.51 times more volatile than Alliance Global Group. It trades about 0.21 of its potential returns per unit of risk. Alliance Global Group is currently generating about -0.09 per unit of risk. If you would invest 3.20 in Eat Beyond Global on August 31, 2024 and sell it today you would earn a total of 3.80 from holding Eat Beyond Global or generate 118.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eat Beyond Global vs. Alliance Global Group
Performance |
| Timeline |
| Eat Beyond Global |
| Alliance Global Group |
Eat Beyond and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and Alliance Global
The main advantage of trading using opposite Eat Beyond and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| Eat Beyond vs. Elysee Development Corp | Eat Beyond vs. Azimut Holding SpA | Eat Beyond vs. Ameritrans Capital Corp | Eat Beyond vs. Aimia Inc |
| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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