Correlation Between RMG Acquisition and Eastern
Can any of the company-specific risk be diversified away by investing in both RMG Acquisition and Eastern 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 RMG Acquisition and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMG Acquisition Corp and Eastern Co, you can compare the effects of market volatilities on RMG Acquisition and Eastern 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 RMG Acquisition with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMG Acquisition and Eastern.
Diversification Opportunities for RMG Acquisition and Eastern
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RMG and Eastern is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding RMG Acquisition Corp and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and RMG Acquisition 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 RMG Acquisition Corp are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of RMG Acquisition i.e., RMG Acquisition and Eastern go up and down completely randomly.
Pair Corralation between RMG Acquisition and Eastern
If you would invest 2,666 in Eastern Co on September 13, 2024 and sell it today you would earn a total of 227.00 from holding Eastern Co or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
RMG Acquisition Corp vs. Eastern Co
Performance |
| Timeline |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eastern |
RMG Acquisition and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMG Acquisition and Eastern
The main advantage of trading using opposite RMG Acquisition and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMG Acquisition position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| RMG Acquisition vs. China Aircraft Leasing | RMG Acquisition vs. Payoneer Global | RMG Acquisition vs. Lipocine | RMG Acquisition vs. Global Ship Lease |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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