Correlation Between Eternal Energy and Better World
Can any of the company-specific risk be diversified away by investing in both Eternal Energy and Better World 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 Eternal Energy and Better World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eternal Energy Public and Better World Green, you can compare the effects of market volatilities on Eternal Energy and Better World 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 Eternal Energy with a short position of Better World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eternal Energy and Better World.
Diversification Opportunities for Eternal Energy and Better World
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eternal and Better is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Eternal Energy Public and Better World Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better World Green and Eternal Energy 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 Eternal Energy Public are associated (or correlated) with Better World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better World Green has no effect on the direction of Eternal Energy i.e., Eternal Energy and Better World go up and down completely randomly.
Pair Corralation between Eternal Energy and Better World
Assuming the 90 days horizon Eternal Energy Public is expected to generate 7.63 times more return on investment than Better World. However, Eternal Energy is 7.63 times more volatile than Better World Green. It trades about 0.46 of its potential returns per unit of risk. Better World Green is currently generating about -0.18 per unit of risk. If you would invest 20.00 in Eternal Energy Public on September 18, 2024 and sell it today you would earn a total of 43.00 from holding Eternal Energy Public or generate 215.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Eternal Energy Public vs. Better World Green
Performance |
| Timeline |
| Eternal Energy Public |
| Better World Green |
Eternal Energy and Better World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eternal Energy and Better World
The main advantage of trading using opposite Eternal Energy and Better World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eternal Energy position performs unexpectedly, Better World 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 Better World will offset losses from the drop in Better World's long position.| Eternal Energy vs. Thai Energy Storage | Eternal Energy vs. Lohakit Metal Public | Eternal Energy vs. 2S Metal Public | Eternal Energy vs. Micro Leasing Public |
| Better World vs. Tata Steel Public | Better World vs. Thaifoods Group Public | Better World vs. TMT Steel Public |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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