Correlation Between Eastwood Bio and Thomson Reuters
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio and Thomson Reuters 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 Thomson Reuters 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 Thomson Reuters Corp, you can compare the effects of market volatilities on Eastwood Bio and Thomson Reuters 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 Thomson Reuters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio and Thomson Reuters.
Diversification Opportunities for Eastwood Bio and Thomson Reuters
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastwood and Thomson is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and Thomson Reuters Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thomson Reuters Corp 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 Thomson Reuters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thomson Reuters Corp has no effect on the direction of Eastwood Bio i.e., Eastwood Bio and Thomson Reuters go up and down completely randomly.
Pair Corralation between Eastwood Bio and Thomson Reuters
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 22.86 times more return on investment than Thomson Reuters. However, Eastwood Bio is 22.86 times more volatile than Thomson Reuters Corp. It trades about 0.08 of its potential returns per unit of risk. Thomson Reuters Corp is currently generating about 0.04 per unit of risk. If you would invest 60.00 in Eastwood Bio Medical Canada on September 22, 2024 and sell it today you would lose (6.00) from holding Eastwood Bio Medical Canada or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastwood Bio Medical Canada vs. Thomson Reuters Corp
Performance |
| Timeline |
| Eastwood Bio Medical |
| Thomson Reuters Corp |
Eastwood Bio and Thomson Reuters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio and Thomson Reuters
The main advantage of trading using opposite Eastwood Bio and Thomson Reuters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio position performs unexpectedly, Thomson Reuters 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 Thomson Reuters will offset losses from the drop in Thomson Reuters' long position.| Eastwood Bio vs. Covalon Technologies | Eastwood Bio vs. Sirona Biochem Corp | Eastwood Bio vs. Medicure | Eastwood Bio vs. Arch Biopartners |
| Thomson Reuters vs. George Weston Limited | Thomson Reuters vs. Waste Connections | Thomson Reuters vs. Saputo Inc | Thomson Reuters vs. Toromont Industries |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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