Correlation Between Optima Health and Eastinco Mining
Can any of the company-specific risk be diversified away by investing in both Optima Health and Eastinco Mining 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 Optima Health and Eastinco Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Eastinco Mining Exploration, you can compare the effects of market volatilities on Optima Health and Eastinco Mining 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 Optima Health with a short position of Eastinco Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Eastinco Mining.
Diversification Opportunities for Optima Health and Eastinco Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Optima and Eastinco is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Eastinco Mining Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastinco Mining Expl and Optima Health 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 Optima Health plc are associated (or correlated) with Eastinco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastinco Mining Expl has no effect on the direction of Optima Health i.e., Optima Health and Eastinco Mining go up and down completely randomly.
Pair Corralation between Optima Health and Eastinco Mining
Assuming the 90 days trading horizon Optima Health plc is expected to generate 0.47 times more return on investment than Eastinco Mining. However, Optima Health plc is 2.12 times less risky than Eastinco Mining. It trades about -0.54 of its potential returns per unit of risk. Eastinco Mining Exploration is currently generating about -0.29 per unit of risk. If you would invest 15,500 in Optima Health plc on October 11, 2024 and sell it today you would lose (1,400) from holding Optima Health plc or give up 9.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Eastinco Mining Exploration
Performance |
| Timeline |
| Optima Health plc |
| Eastinco Mining Expl |
Optima Health and Eastinco Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Eastinco Mining
The main advantage of trading using opposite Optima Health and Eastinco Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Eastinco Mining 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 Eastinco Mining will offset losses from the drop in Eastinco Mining's long position.| Optima Health vs. Toyota Motor Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Newmont Corp | Optima Health vs. ONEOK Inc |
| Eastinco Mining vs. Flow Traders NV | Eastinco Mining vs. Lindsell Train Investment | Eastinco Mining vs. Take Two Interactive Software | Eastinco Mining vs. Evolution Gaming Group |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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