Correlation Between Eaton PLC and MW Investment
Can any of the company-specific risk be diversified away by investing in both Eaton PLC and MW Investment 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 Eaton PLC and MW Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton PLC and MW Investment Holding, you can compare the effects of market volatilities on Eaton PLC and MW Investment 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 Eaton PLC with a short position of MW Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton PLC and MW Investment.
Diversification Opportunities for Eaton PLC and MW Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eaton and MEGH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eaton PLC and MW Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Investment Holding and Eaton PLC 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 Eaton PLC are associated (or correlated) with MW Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Investment Holding has no effect on the direction of Eaton PLC i.e., Eaton PLC and MW Investment go up and down completely randomly.
Pair Corralation between Eaton PLC and MW Investment
If you would invest 33,406 in Eaton PLC on September 2, 2024 and sell it today you would earn a total of 4,136 from holding Eaton PLC or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eaton PLC vs. MW Investment Holding
Performance |
| Timeline |
| Eaton PLC |
| MW Investment Holding |
Eaton PLC and MW Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton PLC and MW Investment
The main advantage of trading using opposite Eaton PLC and MW Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton PLC position performs unexpectedly, MW Investment 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 MW Investment will offset losses from the drop in MW Investment's long position.| Eaton PLC vs. Illinois Tool Works | Eaton PLC vs. Dover | Eaton PLC vs. Cummins | Eaton PLC vs. Parker Hannifin |
| MW Investment vs. GE Aerospace | MW Investment vs. Eaton PLC | MW Investment vs. Siemens AG Class | MW Investment vs. Parker Hannifin |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |