Correlation Between Eastroc Beverage and Keda Clean

Can any of the company-specific risk be diversified away by investing in both Eastroc Beverage and Keda Clean 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 Keda Clean 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 Keda Clean Energy, you can compare the effects of market volatilities on Eastroc Beverage and Keda Clean 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 Keda Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastroc Beverage and Keda Clean.

Diversification Opportunities for Eastroc Beverage and Keda Clean

0.14

Correlation Coefficient

Eastroc Beverage  Keda Clean

Average diversification

The 3 months correlation between Eastroc and Keda is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eastroc Beverage Group and Keda Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keda Clean Energy 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 Keda Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keda Clean Energy has no effect on the direction of Eastroc Beverage i.e., Eastroc Beverage and Keda Clean go up and down completely randomly.

Pair Corralation between Eastroc Beverage and Keda Clean

Assuming the 90 days trading horizon Eastroc Beverage Group is expected to under-perform the Keda Clean. In addition to that, Eastroc Beverage is 1.77 times more volatile than Keda Clean Energy. It trades about -0.03 of its total potential returns per unit of risk. Keda Clean Energy is currently generating about 0.08 per unit of volatility. If you would invest  782.00  in Keda Clean Energy on December 25, 2024 and sell it today you would earn a total of  47.00  from holding Keda Clean Energy or generate 6.01% return on investment over 90 days.

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

Eastroc Beverage Group  vs.  Keda Clean Energy

Eastroc Beverage

Risk-Adjusted Performance

Very Weak

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

Keda Clean Energy

Risk-Adjusted Performance

Weak

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

Pair Trading with Eastroc Beverage and Keda Clean

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

The idea behind Eastroc Beverage Group and Keda Clean Energy 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.