Correlation Between Eastwood Bio-Medical and Brompton Split
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio-Medical and Brompton Split 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-Medical and Brompton Split 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 Brompton Split Banc, you can compare the effects of market volatilities on Eastwood Bio-Medical and Brompton Split 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-Medical with a short position of Brompton Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio-Medical and Brompton Split.
Diversification Opportunities for Eastwood Bio-Medical and Brompton Split
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastwood and Brompton is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and Brompton Split Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Split Banc and Eastwood Bio-Medical 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 Brompton Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Split Banc has no effect on the direction of Eastwood Bio-Medical i.e., Eastwood Bio-Medical and Brompton Split go up and down completely randomly.
Pair Corralation between Eastwood Bio-Medical and Brompton Split
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 15.33 times more return on investment than Brompton Split. However, Eastwood Bio-Medical is 15.33 times more volatile than Brompton Split Banc. It trades about 0.02 of its potential returns per unit of risk. Brompton Split Banc is currently generating about 0.1 per unit of risk. If you would invest 98.00 in Eastwood Bio Medical Canada on September 1, 2024 and sell it today you would lose (23.00) from holding Eastwood Bio Medical Canada or give up 23.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastwood Bio Medical Canada vs. Brompton Split Banc
Performance |
| Timeline |
| Eastwood Bio Medical |
| Brompton Split Banc |
Eastwood Bio-Medical and Brompton Split Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio-Medical and Brompton Split
The main advantage of trading using opposite Eastwood Bio-Medical and Brompton Split positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio-Medical position performs unexpectedly, Brompton Split 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 Brompton Split will offset losses from the drop in Brompton Split's long position.| Eastwood Bio-Medical vs. Covalon Technologies | Eastwood Bio-Medical vs. Sirona Biochem Corp | Eastwood Bio-Medical vs. Arch Biopartners | Eastwood Bio-Medical vs. biOasis Technologies |
| Brompton Split vs. NovaGold Resources | Brompton Split vs. HPQ Silicon Resources | Brompton Split vs. Eastwood Bio Medical Canada | Brompton Split vs. Diamond Fields Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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