Correlation Between MicroStrategy Incorporated and Eastgate Biotech
Can any of the company-specific risk be diversified away by investing in both MicroStrategy Incorporated and Eastgate Biotech 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 MicroStrategy Incorporated and Eastgate Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroStrategy Incorporated and Eastgate Biotech Corp, you can compare the effects of market volatilities on MicroStrategy Incorporated and Eastgate Biotech 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 MicroStrategy Incorporated with a short position of Eastgate Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroStrategy Incorporated and Eastgate Biotech.
Diversification Opportunities for MicroStrategy Incorporated and Eastgate Biotech
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroStrategy and Eastgate is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and Eastgate Biotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastgate Biotech Corp and MicroStrategy Incorporated 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 MicroStrategy Incorporated are associated (or correlated) with Eastgate Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastgate Biotech Corp has no effect on the direction of MicroStrategy Incorporated i.e., MicroStrategy Incorporated and Eastgate Biotech go up and down completely randomly.
Pair Corralation between MicroStrategy Incorporated and Eastgate Biotech
Given the investment horizon of 90 days MicroStrategy Incorporated is expected to generate 27.36 times less return on investment than Eastgate Biotech. But when comparing it to its historical volatility, MicroStrategy Incorporated is 25.5 times less risky than Eastgate Biotech. It trades about 0.15 of its potential returns per unit of risk. Eastgate Biotech Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Eastgate Biotech Corp on September 12, 2024 and sell it today you would lose (0.55) from holding Eastgate Biotech Corp or give up 55.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 65.32% |
| Values | Daily Returns |
MicroStrategy Incorporated vs. Eastgate Biotech Corp
Performance |
| Timeline |
| MicroStrategy Incorporated |
| Eastgate Biotech Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MicroStrategy Incorporated and Eastgate Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroStrategy Incorporated and Eastgate Biotech
The main advantage of trading using opposite MicroStrategy Incorporated and Eastgate Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroStrategy Incorporated position performs unexpectedly, Eastgate Biotech 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 Eastgate Biotech will offset losses from the drop in Eastgate Biotech's long position.| MicroStrategy Incorporated vs. Autodesk | MicroStrategy Incorporated vs. Intuit Inc | MicroStrategy Incorporated vs. Zoom Video Communications | MicroStrategy Incorporated vs. Snowflake |
| Eastgate Biotech vs. ICC Holdings | Eastgate Biotech vs. Jacobs Solutions | Eastgate Biotech vs. GoHealth | Eastgate Biotech vs. NI Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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