Correlation Between Eaton PLC and Rosinbomb
Can any of the company-specific risk be diversified away by investing in both Eaton PLC and Rosinbomb 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 Rosinbomb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton PLC and Rosinbomb, you can compare the effects of market volatilities on Eaton PLC and Rosinbomb 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 Rosinbomb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton PLC and Rosinbomb.
Diversification Opportunities for Eaton PLC and Rosinbomb
Pay attention - limited upside
The 3 months correlation between Eaton and Rosinbomb is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eaton PLC and Rosinbomb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosinbomb 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 Rosinbomb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosinbomb has no effect on the direction of Eaton PLC i.e., Eaton PLC and Rosinbomb go up and down completely randomly.
Pair Corralation between Eaton PLC and Rosinbomb
Considering the 90-day investment horizon Eaton PLC is expected to under-perform the Rosinbomb. But the stock apears to be less risky and, when comparing its historical volatility, Eaton PLC is 4.75 times less risky than Rosinbomb. The stock trades about -0.15 of its potential returns per unit of risk. The Rosinbomb is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.27 in Rosinbomb on November 27, 2024 and sell it today you would earn a total of 0.55 from holding Rosinbomb or generate 203.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton PLC vs. Rosinbomb
Performance |
| Timeline |
| Eaton PLC |
| Rosinbomb |
Eaton PLC and Rosinbomb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton PLC and Rosinbomb
The main advantage of trading using opposite Eaton PLC and Rosinbomb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton PLC position performs unexpectedly, Rosinbomb 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 Rosinbomb will offset losses from the drop in Rosinbomb's long position.| Eaton PLC vs. Illinois Tool Works | Eaton PLC vs. Dover | Eaton PLC vs. Cummins | Eaton PLC vs. Parker Hannifin |
| Rosinbomb vs. Titan Logix Corp | Rosinbomb vs. Nel ASA | Rosinbomb vs. Weir Group PLC | Rosinbomb vs. Nel ASA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |