Correlation Between 1812 Brewing and Eat Well
Can any of the company-specific risk be diversified away by investing in both 1812 Brewing and Eat Well 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 1812 Brewing and Eat Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1812 Brewing and Eat Well Investment, you can compare the effects of market volatilities on 1812 Brewing and Eat Well 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 1812 Brewing with a short position of Eat Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1812 Brewing and Eat Well.
Diversification Opportunities for 1812 Brewing and Eat Well
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 1812 and Eat is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding 1812 Brewing and Eat Well Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eat Well Investment and 1812 Brewing 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 1812 Brewing are associated (or correlated) with Eat Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eat Well Investment has no effect on the direction of 1812 Brewing i.e., 1812 Brewing and Eat Well go up and down completely randomly.
Pair Corralation between 1812 Brewing and Eat Well
Given the investment horizon of 90 days 1812 Brewing is expected to generate 2.47 times more return on investment than Eat Well. However, 1812 Brewing is 2.47 times more volatile than Eat Well Investment. It trades about 0.29 of its potential returns per unit of risk. Eat Well Investment is currently generating about 0.22 per unit of risk. If you would invest 0.01 in 1812 Brewing on September 24, 2024 and sell it today you would earn a total of 0.00 from holding 1812 Brewing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1812 Brewing vs. Eat Well Investment
Performance |
| Timeline |
| 1812 Brewing |
| Eat Well Investment |
1812 Brewing and Eat Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1812 Brewing and Eat Well
The main advantage of trading using opposite 1812 Brewing and Eat Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1812 Brewing position performs unexpectedly, Eat Well 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 Eat Well will offset losses from the drop in Eat Well's long position.| 1812 Brewing vs. Carlyle Secured Lending | 1812 Brewing vs. Sixth Street Specialty | 1812 Brewing vs. Hercules Capital | 1812 Brewing vs. BlackRock TCP Capital |
| Eat Well vs. Flow Capital Corp | Eat Well vs. Guardian Capital Group | Eat Well vs. Urbana | Eat Well vs. Princeton Capital |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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