Correlation Between Eastern and Huabao International
Can any of the company-specific risk be diversified away by investing in both Eastern and Huabao 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 Huabao 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 Huabao International Holdings, you can compare the effects of market volatilities on Eastern and Huabao 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 Huabao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Huabao International.
Diversification Opportunities for Eastern and Huabao International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastern and Huabao is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Huabao International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huabao 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 Huabao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huabao International has no effect on the direction of Eastern i.e., Eastern and Huabao International go up and down completely randomly.
Pair Corralation between Eastern and Huabao International
If you would invest 1,526 in Eastern Co on December 4, 2024 and sell it today you would earn a total of 1,099 from holding Eastern Co or generate 72.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Eastern Co vs. Huabao International Holdings
Performance |
| Timeline |
| Eastern |
| Huabao International |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eastern and Huabao International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Huabao International
The main advantage of trading using opposite Eastern and Huabao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, Huabao 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 Huabao International will offset losses from the drop in Huabao International's long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| Huabao International vs. The Joint Corp | Huabao International vs. WT Offshore | Huabao International vs. Golden Energy Offshore | Huabao International vs. Alphatec Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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