Correlation Between Eastern and Banzai International
Can any of the company-specific risk be diversified away by investing in both Eastern and Banzai International 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 Eastern and Banzai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and Banzai International, you can compare the effects of market volatilities on Eastern and Banzai International 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 Eastern with a short position of Banzai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Banzai International.
Diversification Opportunities for Eastern and Banzai International
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastern and Banzai is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International and Eastern 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 Eastern Co are associated (or correlated) with Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Eastern i.e., Eastern and Banzai International go up and down completely randomly.
Pair Corralation between Eastern and Banzai International
Considering the 90-day investment horizon Eastern Co is expected to generate 0.35 times more return on investment than Banzai International. However, Eastern Co is 2.87 times less risky than Banzai International. It trades about 0.07 of its potential returns per unit of risk. Banzai International is currently generating about -0.12 per unit of risk. If you would invest 2,649 in Eastern Co on December 4, 2024 and sell it today you would earn a total of 68.00 from holding Eastern Co or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Co vs. Banzai International
Performance |
| Timeline |
| Eastern |
| Banzai International |
Eastern and Banzai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Banzai International
The main advantage of trading using opposite Eastern and Banzai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, Banzai International 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 Banzai International will offset losses from the drop in Banzai International's long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| Banzai International vs. McDonalds | Banzai International vs. Vasta Platform | Banzai International vs. Skillful Craftsman Education | Banzai International vs. Gannett Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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