Correlation Between Eastern and Otsuka
Can any of the company-specific risk be diversified away by investing in both Eastern and Otsuka 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 Otsuka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and Otsuka, you can compare the effects of market volatilities on Eastern and Otsuka 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 Otsuka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Otsuka.
Diversification Opportunities for Eastern and Otsuka
Excellent diversification
The 3 months correlation between Eastern and Otsuka is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Otsuka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka 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 Otsuka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka has no effect on the direction of Eastern i.e., Eastern and Otsuka go up and down completely randomly.
Pair Corralation between Eastern and Otsuka
If you would invest 2,695 in Eastern Co on September 14, 2024 and sell it today you would earn a total of 198.00 from holding Eastern Co or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Eastern Co vs. Otsuka
Performance |
| Timeline |
| Eastern |
| Otsuka |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eastern and Otsuka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Otsuka
The main advantage of trading using opposite Eastern and Otsuka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, Otsuka 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 Otsuka will offset losses from the drop in Otsuka's long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| Otsuka vs. Canlan Ice Sports | Otsuka vs. JD Sports Fashion | Otsuka vs. Catalyst Pharmaceuticals | Otsuka vs. Xponential Fitness |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |