Correlation Between Eastwood Bio and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio and Meta Platforms 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 Eastwood Bio and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastwood Bio Medical Canada and Meta Platforms CDR, you can compare the effects of market volatilities on Eastwood Bio and Meta Platforms 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 Eastwood Bio with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio and Meta Platforms.
Diversification Opportunities for Eastwood Bio and Meta Platforms
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastwood and Meta is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and Meta Platforms CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms CDR and Eastwood Bio 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 Eastwood Bio Medical Canada are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms CDR has no effect on the direction of Eastwood Bio i.e., Eastwood Bio and Meta Platforms go up and down completely randomly.
Pair Corralation between Eastwood Bio and Meta Platforms
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to under-perform the Meta Platforms. In addition to that, Eastwood Bio is 6.88 times more volatile than Meta Platforms CDR. It trades about -0.16 of its total potential returns per unit of risk. Meta Platforms CDR is currently generating about 0.34 per unit of volatility. If you would invest 3,283 in Meta Platforms CDR on October 31, 2024 and sell it today you would earn a total of 451.00 from holding Meta Platforms CDR or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastwood Bio Medical Canada vs. Meta Platforms CDR
Performance |
| Timeline |
| Eastwood Bio Medical |
| Meta Platforms CDR |
Eastwood Bio and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio and Meta Platforms
The main advantage of trading using opposite Eastwood Bio and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.| Eastwood Bio vs. Covalon Technologies | Eastwood Bio vs. Sirona Biochem Corp | Eastwood Bio vs. Medicure | Eastwood Bio vs. Arch Biopartners |
| Meta Platforms vs. Arizona Metals Corp | Meta Platforms vs. Mako Mining Corp | Meta Platforms vs. Calibre Mining Corp | Meta Platforms vs. InPlay Oil 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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