Correlation Between Eastern and Northann Corp
Can any of the company-specific risk be diversified away by investing in both Eastern and Northann Corp 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 Northann Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and Northann Corp, you can compare the effects of market volatilities on Eastern and Northann Corp 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 Northann Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Northann Corp.
Diversification Opportunities for Eastern and Northann Corp
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eastern and Northann is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Northann Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northann Corp 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 Northann Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northann Corp has no effect on the direction of Eastern i.e., Eastern and Northann Corp go up and down completely randomly.
Pair Corralation between Eastern and Northann Corp
Considering the 90-day investment horizon Eastern Co is expected to generate 0.26 times more return on investment than Northann Corp. However, Eastern Co is 3.83 times less risky than Northann Corp. It trades about 0.03 of its potential returns per unit of risk. Northann Corp is currently generating about 0.01 per unit of risk. If you would invest 2,183 in Eastern Co on August 24, 2024 and sell it today you would earn a total of 671.00 from holding Eastern Co or generate 30.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.85% |
| Values | Daily Returns |
Eastern Co vs. Northann Corp
Performance |
| Timeline |
| Eastern |
| Northann Corp |
Eastern and Northann Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Northann Corp
The main advantage of trading using opposite Eastern and Northann Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, Northann Corp 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 Northann Corp will offset losses from the drop in Northann Corp's long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| Northann Corp vs. United Guardian | Northann Corp vs. Eastern Co | Northann Corp vs. Awilco Drilling PLC | Northann Corp vs. Helmerich and Payne |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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