Correlation Between Vasta Platform and Eastside Distilling
Can any of the company-specific risk be diversified away by investing in both Vasta Platform and Eastside Distilling 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 Vasta Platform and Eastside Distilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vasta Platform and Eastside Distilling, you can compare the effects of market volatilities on Vasta Platform and Eastside Distilling 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 Vasta Platform with a short position of Eastside Distilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vasta Platform and Eastside Distilling.
Diversification Opportunities for Vasta Platform and Eastside Distilling
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vasta and Eastside is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Eastside Distilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastside Distilling and Vasta Platform 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 Vasta Platform are associated (or correlated) with Eastside Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastside Distilling has no effect on the direction of Vasta Platform i.e., Vasta Platform and Eastside Distilling go up and down completely randomly.
Pair Corralation between Vasta Platform and Eastside Distilling
Given the investment horizon of 90 days Vasta Platform is expected to under-perform the Eastside Distilling. But the stock apears to be less risky and, when comparing its historical volatility, Vasta Platform is 2.76 times less risky than Eastside Distilling. The stock trades about -0.06 of its potential returns per unit of risk. The Eastside Distilling is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Eastside Distilling on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Eastside Distilling or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vasta Platform vs. Eastside Distilling
Performance |
| Timeline |
| Vasta Platform |
| Eastside Distilling |
Vasta Platform and Eastside Distilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vasta Platform and Eastside Distilling
The main advantage of trading using opposite Vasta Platform and Eastside Distilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vasta Platform position performs unexpectedly, Eastside Distilling 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 Eastside Distilling will offset losses from the drop in Eastside Distilling's long position.| Vasta Platform vs. Wah Fu Education | Vasta Platform vs. Golden Sun Education | Vasta Platform vs. Elite Education Group | Vasta Platform vs. ATA Creativity Global |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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