Correlation Between Eagle Mountain and Retail Food
Can any of the company-specific risk be diversified away by investing in both Eagle Mountain and Retail Food 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 Eagle Mountain and Retail Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Mountain Mining and Retail Food Group, you can compare the effects of market volatilities on Eagle Mountain and Retail Food 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 Eagle Mountain with a short position of Retail Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Mountain and Retail Food.
Diversification Opportunities for Eagle Mountain and Retail Food
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and Retail is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Mountain Mining and Retail Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Food Group and Eagle Mountain 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 Eagle Mountain Mining are associated (or correlated) with Retail Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Food Group has no effect on the direction of Eagle Mountain i.e., Eagle Mountain and Retail Food go up and down completely randomly.
Pair Corralation between Eagle Mountain and Retail Food
Assuming the 90 days trading horizon Eagle Mountain Mining is expected to under-perform the Retail Food. In addition to that, Eagle Mountain is 1.68 times more volatile than Retail Food Group. It trades about -0.07 of its total potential returns per unit of risk. Retail Food Group is currently generating about 0.03 per unit of volatility. If you would invest 6.90 in Retail Food Group on August 26, 2024 and sell it today you would earn a total of 0.30 from holding Retail Food Group or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Mountain Mining vs. Retail Food Group
Performance |
| Timeline |
| Eagle Mountain Mining |
| Retail Food Group |
Eagle Mountain and Retail Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Mountain and Retail Food
The main advantage of trading using opposite Eagle Mountain and Retail Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Mountain position performs unexpectedly, Retail Food 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 Retail Food will offset losses from the drop in Retail Food's long position.| Eagle Mountain vs. Northern Star Resources | Eagle Mountain vs. Evolution Mining | Eagle Mountain vs. Bluescope Steel | Eagle Mountain vs. Sandfire Resources NL |
| Retail Food vs. Summit Resources Limited | Retail Food vs. Ecofibre | Retail Food vs. iShares Global Healthcare | Retail Food vs. Adriatic Metals Plc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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