Correlation Between United Guardian and Eastern
Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Eastern Co, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Eastern.
Diversification Opportunities for United Guardian and Eastern
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Eastern is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Eastern go up and down completely randomly.
Pair Corralation between United Guardian and Eastern
Allowing for the 90-day total investment horizon United Guardian is expected to under-perform the Eastern. In addition to that, United Guardian is 1.32 times more volatile than Eastern Co. It trades about -0.42 of its total potential returns per unit of risk. Eastern Co is currently generating about -0.21 per unit of volatility. If you would invest 3,188 in Eastern Co on August 28, 2024 and sell it today you would lose (376.00) from holding Eastern Co or give up 11.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Eastern Co
Performance |
| Timeline |
| United Guardian |
| Eastern |
United Guardian and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Eastern
The main advantage of trading using opposite United Guardian and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |