Correlation Between Eagle Plains and Solar Alliance
Can any of the company-specific risk be diversified away by investing in both Eagle Plains and Solar Alliance 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 Eagle Plains and Solar Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Plains Resources and Solar Alliance Energy, you can compare the effects of market volatilities on Eagle Plains and Solar Alliance 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 Eagle Plains with a short position of Solar Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Plains and Solar Alliance.
Diversification Opportunities for Eagle Plains and Solar Alliance
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and Solar is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Plains Resources and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy and Eagle Plains 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 Eagle Plains Resources are associated (or correlated) with Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of Eagle Plains i.e., Eagle Plains and Solar Alliance go up and down completely randomly.
Pair Corralation between Eagle Plains and Solar Alliance
Assuming the 90 days horizon Eagle Plains Resources is expected to generate 0.4 times more return on investment than Solar Alliance. However, Eagle Plains Resources is 2.49 times less risky than Solar Alliance. It trades about 0.17 of its potential returns per unit of risk. Solar Alliance Energy is currently generating about -0.05 per unit of risk. If you would invest 10.00 in Eagle Plains Resources on November 29, 2024 and sell it today you would earn a total of 2.00 from holding Eagle Plains Resources or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Plains Resources vs. Solar Alliance Energy
Performance |
| Timeline |
| Eagle Plains Resources |
| Solar Alliance Energy |
Eagle Plains and Solar Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Plains and Solar Alliance
The main advantage of trading using opposite Eagle Plains and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Plains position performs unexpectedly, Solar Alliance 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 Solar Alliance will offset losses from the drop in Solar Alliance's long position.| Eagle Plains vs. Commander Resources | Eagle Plains vs. Radius Gold | Eagle Plains vs. Fjordland Exploration | Eagle Plains vs. Bitterroot Resources |
| Solar Alliance vs. Braille Energy Systems | Solar Alliance vs. Therma Bright | Solar Alliance vs. CryptoStar Corp | Solar Alliance vs. Manganese X Energy |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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