Correlation Between Goodfood Market and Eddy Smart
Can any of the company-specific risk be diversified away by investing in both Goodfood Market and Eddy Smart 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 Goodfood Market and Eddy Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfood Market Corp and Eddy Smart Home, you can compare the effects of market volatilities on Goodfood Market and Eddy Smart 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 Goodfood Market with a short position of Eddy Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and Eddy Smart.
Diversification Opportunities for Goodfood Market and Eddy Smart
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goodfood and Eddy is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and Eddy Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eddy Smart Home and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with Eddy Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eddy Smart Home has no effect on the direction of Goodfood Market i.e., Goodfood Market and Eddy Smart go up and down completely randomly.
Pair Corralation between Goodfood Market and Eddy Smart
Assuming the 90 days trading horizon Goodfood Market is expected to generate 6.55 times less return on investment than Eddy Smart. But when comparing it to its historical volatility, Goodfood Market Corp is 5.53 times less risky than Eddy Smart. It trades about 0.07 of its potential returns per unit of risk. Eddy Smart Home is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Eddy Smart Home on December 4, 2024 and sell it today you would earn a total of 91.00 from holding Eddy Smart Home or generate 60.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodfood Market Corp vs. Eddy Smart Home
Performance |
| Timeline |
| Goodfood Market Corp |
| Eddy Smart Home |
Goodfood Market and Eddy Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodfood Market and Eddy Smart
The main advantage of trading using opposite Goodfood Market and Eddy Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfood Market position performs unexpectedly, Eddy Smart 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 Eddy Smart will offset losses from the drop in Eddy Smart's long position.| Goodfood Market vs. WELL Health Technologies | Goodfood Market vs. Lightspeed Commerce | Goodfood Market vs. Docebo Inc | Goodfood Market vs. Dye Durham |
| Eddy Smart vs. Simply Better Brands | Eddy Smart vs. Forward Water Technologies | Eddy Smart vs. Pulse Oil Corp | Eddy Smart vs. C3 Metals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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