Correlation Between EOSDAC and NLG
Can any of the company-specific risk be diversified away by investing in both EOSDAC and NLG 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 EOSDAC and NLG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOSDAC and NLG, you can compare the effects of market volatilities on EOSDAC and NLG 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 EOSDAC with a short position of NLG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOSDAC and NLG.
Diversification Opportunities for EOSDAC and NLG
Significant diversification
The 3 months correlation between EOSDAC and NLG is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC and NLG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLG and EOSDAC 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 EOSDAC are associated (or correlated) with NLG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLG has no effect on the direction of EOSDAC i.e., EOSDAC and NLG go up and down completely randomly.
Pair Corralation between EOSDAC and NLG
Assuming the 90 days trading horizon EOSDAC is expected to generate 13.24 times more return on investment than NLG. However, EOSDAC is 13.24 times more volatile than NLG. It trades about 0.07 of its potential returns per unit of risk. NLG is currently generating about 0.21 per unit of risk. If you would invest 0.03 in EOSDAC on September 2, 2024 and sell it today you would earn a total of 0.01 from holding EOSDAC or generate 36.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 18.24% |
| Values | Daily Returns |
EOSDAC vs. NLG
Performance |
| Timeline |
| EOSDAC |
| NLG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EOSDAC and NLG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOSDAC and NLG
The main advantage of trading using opposite EOSDAC and NLG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOSDAC position performs unexpectedly, NLG 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 NLG will offset losses from the drop in NLG's long position.The idea behind EOSDAC and NLG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |