Correlation Between Eat Beyond and China Coal
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and China Coal 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 China Coal 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 China Coal Energy, you can compare the effects of market volatilities on Eat Beyond and China Coal 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 China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and China Coal.
Diversification Opportunities for Eat Beyond and China Coal
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eat and China is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy 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 China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of Eat Beyond i.e., Eat Beyond and China Coal go up and down completely randomly.
Pair Corralation between Eat Beyond and China Coal
Assuming the 90 days horizon Eat Beyond Global is expected to generate 3.76 times more return on investment than China Coal. However, Eat Beyond is 3.76 times more volatile than China Coal Energy. It trades about 0.07 of its potential returns per unit of risk. China Coal Energy is currently generating about 0.05 per unit of risk. If you would invest 19.00 in Eat Beyond Global on August 28, 2024 and sell it today you would lose (9.60) from holding Eat Beyond Global or give up 50.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Eat Beyond Global vs. China Coal Energy
Performance |
| Timeline |
| Eat Beyond Global |
| China Coal Energy |
Eat Beyond and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and China Coal
The main advantage of trading using opposite Eat Beyond and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, China Coal 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 China Coal will offset losses from the drop in China Coal'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 |
| China Coal vs. Alliance Resource Partners | China Coal vs. Astera Labs, Common | China Coal vs. Autodesk | China Coal vs. Applied Blockchain |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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