Correlation Between Eastern and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both Eastern and CAVA Group, 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 CAVA Group, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and CAVA Group,, you can compare the effects of market volatilities on Eastern and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and CAVA Group,.
Diversification Opportunities for Eastern and CAVA Group,
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eastern and CAVA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Eastern i.e., Eastern and CAVA Group, go up and down completely randomly.
Pair Corralation between Eastern and CAVA Group,
Considering the 90-day investment horizon Eastern Co is expected to generate 0.6 times more return on investment than CAVA Group,. However, Eastern Co is 1.66 times less risky than CAVA Group,. It trades about 0.19 of its potential returns per unit of risk. CAVA Group, is currently generating about -0.15 per unit of risk. If you would invest 2,666 in Eastern Co on September 13, 2024 and sell it today you would earn a total of 231.00 from holding Eastern Co or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Co vs. CAVA Group,
Performance |
| Timeline |
| Eastern |
| CAVA Group, |
Eastern and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and CAVA Group,
The main advantage of trading using opposite Eastern and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'s long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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