Correlation Between East Africa and Eureka Acquisition
Can any of the company-specific risk be diversified away by investing in both East Africa and Eureka Acquisition 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 East Africa and Eureka Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Eureka Acquisition Corp, you can compare the effects of market volatilities on East Africa and Eureka Acquisition 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 East Africa with a short position of Eureka Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Eureka Acquisition.
Diversification Opportunities for East Africa and Eureka Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and Eureka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Eureka Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eureka Acquisition Corp and East Africa 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 East Africa Metals are associated (or correlated) with Eureka Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eureka Acquisition Corp has no effect on the direction of East Africa i.e., East Africa and Eureka Acquisition go up and down completely randomly.
Pair Corralation between East Africa and Eureka Acquisition
Assuming the 90 days horizon East Africa is expected to generate 2.21 times less return on investment than Eureka Acquisition. But when comparing it to its historical volatility, East Africa Metals is 1.66 times less risky than Eureka Acquisition. It trades about 0.08 of its potential returns per unit of risk. Eureka Acquisition Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Eureka Acquisition Corp on November 5, 2024 and sell it today you would earn a total of 1,018 from holding Eureka Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 19.68% |
| Values | Daily Returns |
East Africa Metals vs. Eureka Acquisition Corp
Performance |
| Timeline |
| East Africa Metals |
| Eureka Acquisition Corp |
East Africa and Eureka Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Eureka Acquisition
The main advantage of trading using opposite East Africa and Eureka Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, Eureka Acquisition 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 Eureka Acquisition will offset losses from the drop in Eureka Acquisition's long position.| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
| Eureka Acquisition vs. Voyager Acquisition Corp | Eureka Acquisition vs. YHN Acquisition I | Eureka Acquisition vs. YHN Acquisition I | Eureka Acquisition vs. CO2 Energy Transition |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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