Correlation Between ECD Automotive and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both ECD Automotive and Jeffs Brands 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 ECD Automotive and Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECD Automotive Design and Jeffs Brands, you can compare the effects of market volatilities on ECD Automotive and Jeffs Brands 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 ECD Automotive with a short position of Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and Jeffs Brands.
Diversification Opportunities for ECD Automotive and Jeffs Brands
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ECD and Jeffs is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands and ECD Automotive 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 ECD Automotive Design are associated (or correlated) with Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of ECD Automotive i.e., ECD Automotive and Jeffs Brands go up and down completely randomly.
Pair Corralation between ECD Automotive and Jeffs Brands
Given the investment horizon of 90 days ECD Automotive Design is expected to under-perform the Jeffs Brands. But the stock apears to be less risky and, when comparing its historical volatility, ECD Automotive Design is 7.73 times less risky than Jeffs Brands. The stock trades about -0.05 of its potential returns per unit of risk. The Jeffs Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Jeffs Brands on September 13, 2024 and sell it today you would lose (602.00) from holding Jeffs Brands or give up 69.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECD Automotive Design vs. Jeffs Brands
Performance |
| Timeline |
| ECD Automotive Design |
| Jeffs Brands |
ECD Automotive and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECD Automotive and Jeffs Brands
The main advantage of trading using opposite ECD Automotive and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECD Automotive position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.| ECD Automotive vs. Verde Clean Fuels | ECD Automotive vs. Nuvalent | ECD Automotive vs. National CineMedia | ECD Automotive vs. ServiceNow |
| Jeffs Brands vs. Twilio Inc | Jeffs Brands vs. Getty Images Holdings | Jeffs Brands vs. Baidu Inc | Jeffs Brands vs. Snap Inc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |