Correlation Between Eat Beyond and Century Next
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and Century Next 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 Century Next 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 Century Next Financial, you can compare the effects of market volatilities on Eat Beyond and Century Next 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 Century Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and Century Next.
Diversification Opportunities for Eat Beyond and Century Next
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eat and Century is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and Century Next Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Next Financial 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 Century Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Next Financial has no effect on the direction of Eat Beyond i.e., Eat Beyond and Century Next go up and down completely randomly.
Pair Corralation between Eat Beyond and Century Next
Assuming the 90 days horizon Eat Beyond Global is expected to generate 90.84 times more return on investment than Century Next. However, Eat Beyond is 90.84 times more volatile than Century Next Financial. It trades about 0.22 of its potential returns per unit of risk. Century Next Financial is currently generating about 0.16 per unit of risk. If you would invest 4.10 in Eat Beyond Global on August 29, 2024 and sell it today you would earn a total of 5.90 from holding Eat Beyond Global or generate 143.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eat Beyond Global vs. Century Next Financial
Performance |
| Timeline |
| Eat Beyond Global |
| Century Next Financial |
Eat Beyond and Century Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and Century Next
The main advantage of trading using opposite Eat Beyond and Century Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, Century Next 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 Century Next will offset losses from the drop in Century Next'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 |
| Century Next vs. Citizens Financial Corp | Century Next vs. Triad Business Bank | Century Next vs. First Ottawa Bancshares | Century Next vs. CCSB Financial Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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