Correlation Between Eat Beyond and Kermode Resources
Can any of the company-specific risk be diversified away by investing in both Eat Beyond and Kermode Resources 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 Kermode Resources 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 Kermode Resources, you can compare the effects of market volatilities on Eat Beyond and Kermode Resources 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 Kermode Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and Kermode Resources.
Diversification Opportunities for Eat Beyond and Kermode Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eat and Kermode is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global and Kermode Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kermode Resources 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 Kermode Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kermode Resources has no effect on the direction of Eat Beyond i.e., Eat Beyond and Kermode Resources go up and down completely randomly.
Pair Corralation between Eat Beyond and Kermode Resources
Assuming the 90 days horizon Eat Beyond Global is expected to generate 5.63 times more return on investment than Kermode Resources. However, Eat Beyond is 5.63 times more volatile than Kermode Resources. It trades about 0.15 of its potential returns per unit of risk. Kermode Resources is currently generating about 0.03 per unit of risk. If you would invest 4.00 in Eat Beyond Global on August 30, 2024 and sell it today you would earn a total of 3.02 from holding Eat Beyond Global or generate 75.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eat Beyond Global vs. Kermode Resources
Performance |
| Timeline |
| Eat Beyond Global |
| Kermode Resources |
Eat Beyond and Kermode Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and Kermode Resources
The main advantage of trading using opposite Eat Beyond and Kermode Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond position performs unexpectedly, Kermode Resources 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 Kermode Resources will offset losses from the drop in Kermode Resources' 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 |
| Kermode Resources vs. Aurion Resources | Kermode Resources vs. Orezone Gold Corp | Kermode Resources vs. Rio2 Limited | Kermode Resources vs. Norsemont Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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