Correlation Between Exotic Food and East Coast
Can any of the company-specific risk be diversified away by investing in both Exotic Food and East Coast 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 Exotic Food and East Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exotic Food Public and East Coast Furnitech, you can compare the effects of market volatilities on Exotic Food and East Coast 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 Exotic Food with a short position of East Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exotic Food and East Coast.
Diversification Opportunities for Exotic Food and East Coast
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exotic and East is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Exotic Food Public and East Coast Furnitech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Coast Furnitech and Exotic Food 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 Exotic Food Public are associated (or correlated) with East Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Coast Furnitech has no effect on the direction of Exotic Food i.e., Exotic Food and East Coast go up and down completely randomly.
Pair Corralation between Exotic Food and East Coast
Assuming the 90 days horizon Exotic Food is expected to generate 11.11 times less return on investment than East Coast. But when comparing it to its historical volatility, Exotic Food Public is 13.77 times less risky than East Coast. It trades about 0.04 of its potential returns per unit of risk. East Coast Furnitech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 170.00 in East Coast Furnitech on November 5, 2024 and sell it today you would lose (144.00) from holding East Coast Furnitech or give up 84.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exotic Food Public vs. East Coast Furnitech
Performance |
| Timeline |
| Exotic Food Public |
| East Coast Furnitech |
Exotic Food and East Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exotic Food and East Coast
The main advantage of trading using opposite Exotic Food and East Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exotic Food position performs unexpectedly, East Coast 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 East Coast will offset losses from the drop in East Coast's long position.| Exotic Food vs. Mega Lifesciences Public | Exotic Food vs. Com7 PCL | Exotic Food vs. Thai Union Group | Exotic Food vs. Jay Mart Public |
| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. Chewathai Public |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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