Correlation Between Sherborne Investors and Eastinco Mining
Can any of the company-specific risk be diversified away by investing in both Sherborne Investors 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 Sherborne Investors and Eastinco Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherborne Investors Guernsey and Eastinco Mining Exploration, you can compare the effects of market volatilities on Sherborne Investors 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 Sherborne Investors with a short position of Eastinco Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherborne Investors and Eastinco Mining.
Diversification Opportunities for Sherborne Investors and Eastinco Mining
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sherborne and Eastinco is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sherborne Investors Guernsey 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 Sherborne Investors 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 Sherborne Investors Guernsey 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 Sherborne Investors i.e., Sherborne Investors and Eastinco Mining go up and down completely randomly.
Pair Corralation between Sherborne Investors and Eastinco Mining
Assuming the 90 days trading horizon Sherborne Investors Guernsey is expected to under-perform the Eastinco Mining. But the stock apears to be less risky and, when comparing its historical volatility, Sherborne Investors Guernsey is 121.83 times less risky than Eastinco Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Eastinco Mining Exploration is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,500 in Eastinco Mining Exploration on August 25, 2024 and sell it today you would lose (1,500) from holding Eastinco Mining Exploration or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Sherborne Investors Guernsey vs. Eastinco Mining Exploration
Performance |
| Timeline |
| Sherborne Investors |
| Eastinco Mining Expl |
Sherborne Investors and Eastinco Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherborne Investors and Eastinco Mining
The main advantage of trading using opposite Sherborne Investors and Eastinco Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherborne Investors 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.| Sherborne Investors vs. Eastinco Mining Exploration | Sherborne Investors vs. Anglesey Mining | Sherborne Investors vs. Lundin Mining Corp | Sherborne Investors vs. GoldMining |
| Eastinco Mining vs. AMG Advanced Metallurgical | Eastinco Mining vs. Future Metals NL | Eastinco Mining vs. Accsys Technologies PLC | Eastinco Mining vs. Microchip Technology |
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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