Correlation Between Eddy Smart and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both Eddy Smart and INTEL CDR 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 Eddy Smart and INTEL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eddy Smart Home and INTEL CDR, you can compare the effects of market volatilities on Eddy Smart and INTEL CDR 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 Eddy Smart with a short position of INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eddy Smart and INTEL CDR.
Diversification Opportunities for Eddy Smart and INTEL CDR
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eddy and INTEL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eddy Smart Home and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR and Eddy Smart 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 Eddy Smart Home are associated (or correlated) with INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Eddy Smart i.e., Eddy Smart and INTEL CDR go up and down completely randomly.
Pair Corralation between Eddy Smart and INTEL CDR
Assuming the 90 days horizon Eddy Smart Home is expected to under-perform the INTEL CDR. But the stock apears to be less risky and, when comparing its historical volatility, Eddy Smart Home is 1.82 times less risky than INTEL CDR. The stock trades about -0.27 of its potential returns per unit of risk. The INTEL CDR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,190 in INTEL CDR on November 28, 2024 and sell it today you would earn a total of 152.00 from holding INTEL CDR or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eddy Smart Home vs. INTEL CDR
Performance |
| Timeline |
| Eddy Smart Home |
| INTEL CDR |
Eddy Smart and INTEL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eddy Smart and INTEL CDR
The main advantage of trading using opposite Eddy Smart and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eddy Smart position performs unexpectedly, INTEL CDR 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 INTEL CDR will offset losses from the drop in INTEL CDR's long position.| Eddy Smart vs. Simply Better Brands | Eddy Smart vs. Forward Water Technologies | Eddy Smart vs. Pulse Oil Corp | Eddy Smart vs. C3 Metals |
| INTEL CDR vs. Toronto Dominion Bank Pref | INTEL CDR vs. Constellation Software | INTEL CDR vs. CI Financial Corp | INTEL CDR vs. Hampton Financial Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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