Correlation Between Vanfund Urban and Eastroc Beverage

Can any of the company-specific risk be diversified away by investing in both Vanfund Urban and Eastroc Beverage 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 Vanfund Urban and Eastroc Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vanfund Urban Investment and Eastroc Beverage Group, you can compare the effects of market volatilities on Vanfund Urban and Eastroc Beverage 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 Vanfund Urban with a short position of Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanfund Urban and Eastroc Beverage.

Diversification Opportunities for Vanfund Urban and Eastroc Beverage

-0.57

Correlation Coefficient

Vanfund Urban  Eastroc Beverage

Excellent diversification

The 3 months correlation between Vanfund and Eastroc is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vanfund Urban Investment and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage and Vanfund Urban 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 Vanfund Urban Investment are associated (or correlated) with Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of Vanfund Urban i.e., Vanfund Urban and Eastroc Beverage go up and down completely randomly.

Pair Corralation between Vanfund Urban and Eastroc Beverage

Assuming the 90 days trading horizon Vanfund Urban Investment is expected to under-perform the Eastroc Beverage. In addition to that, Vanfund Urban is 1.52 times more volatile than Eastroc Beverage Group. It trades about -0.03 of its total potential returns per unit of risk. Eastroc Beverage Group is currently generating about 0.08 per unit of volatility. If you would invest  22,048  in Eastroc Beverage Group on October 26, 2024 and sell it today you would earn a total of  2,231  from holding Eastroc Beverage Group or generate 10.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vanfund Urban Investment  vs.  Eastroc Beverage Group

Vanfund Urban Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanfund Urban Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vanfund Urban is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eastroc Beverage

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eastroc Beverage Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eastroc Beverage may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vanfund Urban and Eastroc Beverage

The main advantage of trading using opposite Vanfund Urban and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanfund Urban position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage's long position.

The idea behind Vanfund Urban Investment and Eastroc Beverage Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.