Correlation Between Eat Beyond and First Community
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and First Community 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 First Community 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 First Community, you can compare the effects of market volatilities on Eat Beyond and First Community 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 First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and First Community.
Diversification Opportunities for Eat Beyond and First Community
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eat and First is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of Eat Beyond i.e., Eat Beyond and First Community go up and down completely randomly.
Pair Corralation between Eat Beyond and First Community
Assuming the 90 days horizon Eat Beyond Global is expected to generate 15.26 times more return on investment than First Community. However, Eat Beyond is 15.26 times more volatile than First Community. It trades about 0.09 of its potential returns per unit of risk. First Community is currently generating about 0.0 per unit of risk. If you would invest 5.00 in Eat Beyond Global on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Eat Beyond Global or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eat Beyond Global vs. First Community
Performance |
| Timeline |
| Eat Beyond Global |
| First Community |
Eat Beyond and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and First Community
The main advantage of trading using opposite Eat Beyond and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community'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 |
| First Community vs. CCSB Financial Corp | First Community vs. Delhi Bank Corp | First Community vs. BEO Bancorp | First Community vs. First Community Financial |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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