Correlation Between Eastern and Energy
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By analyzing existing cross correlation between Eastern Co and Energy Transfer 7125, you can compare the effects of market volatilities on Eastern and Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Energy.
Diversification Opportunities for Eastern and Energy
Very weak diversification
The 3 months correlation between Eastern and Energy is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Energy Transfer 7125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Transfer 7125 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Transfer 7125 has no effect on the direction of Eastern i.e., Eastern and Energy go up and down completely randomly.
Pair Corralation between Eastern and Energy
Considering the 90-day investment horizon Eastern Co is expected to under-perform the Energy. In addition to that, Eastern is 1.4 times more volatile than Energy Transfer 7125. It trades about -0.02 of its total potential returns per unit of risk. Energy Transfer 7125 is currently generating about 0.06 per unit of volatility. If you would invest 10,152 in Energy Transfer 7125 on October 20, 2024 and sell it today you would earn a total of 148.00 from holding Energy Transfer 7125 or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eastern Co vs. Energy Transfer 7125
Performance |
| Timeline |
| Eastern |
| Energy Transfer 7125 |
Eastern and Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Energy
The main advantage of trading using opposite Eastern and Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, Energy 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 Energy will offset losses from the drop in Energy's long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| Energy vs. AEP TEX INC | Energy vs. US BANK NATIONAL | Energy vs. Bank of Montreal | Energy vs. Tonix Pharmaceuticals Holding |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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