Correlation Between ESE Entertainment and GreenBank Capital
Can any of the company-specific risk be diversified away by investing in both ESE Entertainment and GreenBank Capital 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 ESE Entertainment and GreenBank Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESE Entertainment and GreenBank Capital, you can compare the effects of market volatilities on ESE Entertainment and GreenBank Capital 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 ESE Entertainment with a short position of GreenBank Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESE Entertainment and GreenBank Capital.
Diversification Opportunities for ESE Entertainment and GreenBank Capital
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ESE and GreenBank is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ESE Entertainment and GreenBank Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenBank Capital and ESE Entertainment 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 ESE Entertainment are associated (or correlated) with GreenBank Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenBank Capital has no effect on the direction of ESE Entertainment i.e., ESE Entertainment and GreenBank Capital go up and down completely randomly.
Pair Corralation between ESE Entertainment and GreenBank Capital
Assuming the 90 days horizon ESE Entertainment is expected to under-perform the GreenBank Capital. But the otc stock apears to be less risky and, when comparing its historical volatility, ESE Entertainment is 2.1 times less risky than GreenBank Capital. The otc stock trades about -0.17 of its potential returns per unit of risk. The GreenBank Capital is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1.09 in GreenBank Capital on September 1, 2024 and sell it today you would lose (0.22) from holding GreenBank Capital or give up 20.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESE Entertainment vs. GreenBank Capital
Performance |
| Timeline |
| ESE Entertainment |
| GreenBank Capital |
ESE Entertainment and GreenBank Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESE Entertainment and GreenBank Capital
The main advantage of trading using opposite ESE Entertainment and GreenBank Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESE Entertainment position performs unexpectedly, GreenBank Capital 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 GreenBank Capital will offset losses from the drop in GreenBank Capital's long position.| ESE Entertainment vs. New Wave Holdings | ESE Entertainment vs. ZoomerMedia Limited | ESE Entertainment vs. OverActive Media Corp | ESE Entertainment vs. Network Media Group |
| GreenBank Capital vs. ESE Entertainment | GreenBank Capital vs. St Georges Eco Mining Corp | GreenBank Capital vs. Victory Square Technologies | GreenBank Capital vs. PowerBand Solutions |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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