Correlation Between Eastroc Beverage and SIASUN Robot

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

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

Diversification Opportunities for Eastroc Beverage and SIASUN Robot

0.22

Correlation Coefficient

Eastroc Beverage  SIASUN Robot

Modest diversification

The 3 months correlation between Eastroc and SIASUN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eastroc Beverage Group and SIASUN Robot Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIASUN Robot Automation and Eastroc Beverage 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 Eastroc Beverage Group are associated (or correlated) with SIASUN Robot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIASUN Robot Automation has no effect on the direction of Eastroc Beverage i.e., Eastroc Beverage and SIASUN Robot go up and down completely randomly.

Pair Corralation between Eastroc Beverage and SIASUN Robot

Assuming the 90 days trading horizon Eastroc Beverage Group is expected to generate 0.66 times more return on investment than SIASUN Robot. However, Eastroc Beverage Group is 1.51 times less risky than SIASUN Robot. It trades about 0.05 of its potential returns per unit of risk. SIASUN Robot Automation is currently generating about 0.0 per unit of risk. If you would invest  24,199  in Eastroc Beverage Group on October 23, 2024 and sell it today you would earn a total of  480.00  from holding Eastroc Beverage Group or generate 1.98% return on investment over 90 days.

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

Eastroc Beverage Group  vs.  SIASUN Robot Automation

Eastroc Beverage

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastroc Beverage Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eastroc Beverage sustained solid returns over the last few months and may actually be approaching a breakup point.

SIASUN Robot Automation

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIASUN Robot Automation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SIASUN Robot sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eastroc Beverage and SIASUN Robot

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

The idea behind Eastroc Beverage Group and SIASUN Robot Automation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.