Correlation Between Eat Well and New America
Can any of the company-specific risk be diversified away by investing in both Eat Well and New America 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 Eat Well and New America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eat Well Investment and New America High, you can compare the effects of market volatilities on Eat Well and New America 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 Eat Well with a short position of New America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Well and New America.
Diversification Opportunities for Eat Well and New America
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eat and New is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Eat Well Investment and New America High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New America High and Eat Well 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 Eat Well Investment are associated (or correlated) with New America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New America High has no effect on the direction of Eat Well i.e., Eat Well and New America go up and down completely randomly.
Pair Corralation between Eat Well and New America
Assuming the 90 days horizon Eat Well Investment is expected to generate 530.02 times more return on investment than New America. However, Eat Well is 530.02 times more volatile than New America High. It trades about 0.19 of its potential returns per unit of risk. New America High is currently generating about 0.01 per unit of risk. If you would invest 1.00 in Eat Well Investment on December 11, 2024 and sell it today you would earn a total of 0.50 from holding Eat Well Investment or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Eat Well Investment vs. New America High
Performance |
| Timeline |
| Eat Well Investment |
| New America High |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Eat Well and New America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Well and New America
The main advantage of trading using opposite Eat Well and New America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Well position performs unexpectedly, New America 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 New America will offset losses from the drop in New America's long position.| Eat Well vs. Flow Capital Corp | Eat Well vs. Guardian Capital Group | Eat Well vs. Urbana | Eat Well vs. Princeton Capital |
| New America vs. Pioneer Municipal High | New America vs. DWS Municipal Income | New America vs. RiverNorth Specialty Finance | New America vs. Putnam Managed Municipal |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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