Correlation Between Eastwood Bio and Tesla
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio and Tesla 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 Tesla 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 Tesla Inc CDR, you can compare the effects of market volatilities on Eastwood Bio and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio and Tesla.
Diversification Opportunities for Eastwood Bio and Tesla
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastwood and Tesla is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and Tesla Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc CDR has no effect on the direction of Eastwood Bio i.e., Eastwood Bio and Tesla go up and down completely randomly.
Pair Corralation between Eastwood Bio and Tesla
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 3.76 times more return on investment than Tesla. However, Eastwood Bio is 3.76 times more volatile than Tesla Inc CDR. It trades about 0.06 of its potential returns per unit of risk. Tesla Inc CDR is currently generating about 0.04 per unit of risk. If you would invest 65.00 in Eastwood Bio Medical Canada on November 30, 2024 and sell it today you would lose (6.00) from holding Eastwood Bio Medical Canada or give up 9.23% 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. Tesla Inc CDR
Performance |
| Timeline |
| Eastwood Bio Medical |
| Tesla Inc CDR |
Eastwood Bio and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio and Tesla
The main advantage of trading using opposite Eastwood Bio and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla's long position.| Eastwood Bio vs. Covalon Technologies | Eastwood Bio vs. Sirona Biochem Corp | Eastwood Bio vs. Medicure | Eastwood Bio vs. Arch Biopartners |
| Tesla vs. Diversified Royalty Corp | Tesla vs. Maple Peak Investments | Tesla vs. Western Investment | Tesla vs. Advent Wireless |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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