Correlation Between Eastwood Bio and NFI
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio and NFI 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 NFI 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 NFI Group, you can compare the effects of market volatilities on Eastwood Bio and NFI 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 NFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio and NFI.
Diversification Opportunities for Eastwood Bio and NFI
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastwood and NFI is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group 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 NFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFI Group has no effect on the direction of Eastwood Bio i.e., Eastwood Bio and NFI go up and down completely randomly.
Pair Corralation between Eastwood Bio and NFI
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 12.12 times more return on investment than NFI. However, Eastwood Bio is 12.12 times more volatile than NFI Group. It trades about 0.12 of its potential returns per unit of risk. NFI Group is currently generating about -0.3 per unit of risk. If you would invest 70.00 in Eastwood Bio Medical Canada on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Eastwood Bio Medical Canada or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastwood Bio Medical Canada vs. NFI Group
Performance |
| Timeline |
| Eastwood Bio Medical |
| NFI Group |
Eastwood Bio and NFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio and NFI
The main advantage of trading using opposite Eastwood Bio and NFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio position performs unexpectedly, NFI 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 NFI will offset losses from the drop in NFI's long position.| Eastwood Bio vs. Covalon Technologies | Eastwood Bio vs. Sirona Biochem Corp | Eastwood Bio vs. Medicure | Eastwood Bio vs. Arch Biopartners |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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