Correlation Between Eastern and FEDEX
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By analyzing existing cross correlation between Eastern Co and FEDEX P 405, you can compare the effects of market volatilities on Eastern and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and FEDEX.
Diversification Opportunities for Eastern and FEDEX
Significant diversification
The 3 months correlation between Eastern and FEDEX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and FEDEX P 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 405 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 405 has no effect on the direction of Eastern i.e., Eastern and FEDEX go up and down completely randomly.
Pair Corralation between Eastern and FEDEX
Considering the 90-day investment horizon Eastern Co is expected to generate 1.84 times more return on investment than FEDEX. However, Eastern is 1.84 times more volatile than FEDEX P 405. It trades about 0.26 of its potential returns per unit of risk. FEDEX P 405 is currently generating about 0.33 per unit of risk. If you would invest 2,714 in Eastern Co on September 12, 2024 and sell it today you would earn a total of 286.00 from holding Eastern Co or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Eastern Co vs. FEDEX P 405
Performance |
| Timeline |
| Eastern |
| FEDEX P 405 |
Eastern and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and FEDEX
The main advantage of trading using opposite Eastern and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
| FEDEX vs. Seadrill Limited | FEDEX vs. Precision Drilling | FEDEX vs. Dave Busters Entertainment | FEDEX vs. Ark Restaurants Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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