Correlation Between Eagle Cold and Farglory FTZ

Can any of the company-specific risk be diversified away by investing in both Eagle Cold and Farglory FTZ 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 Eagle Cold and Farglory FTZ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagle Cold Storage and Farglory FTZ Investment, you can compare the effects of market volatilities on Eagle Cold and Farglory FTZ 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 Eagle Cold with a short position of Farglory FTZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Cold and Farglory FTZ.

Diversification Opportunities for Eagle Cold and Farglory FTZ

-0.11

Correlation Coefficient

Eagle Cold  Farglory FTZ

Good diversification

The 3 months correlation between Eagle and Farglory is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Cold Storage and Farglory FTZ Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farglory FTZ Investment and Eagle Cold 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 Eagle Cold Storage are associated (or correlated) with Farglory FTZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farglory FTZ Investment has no effect on the direction of Eagle Cold i.e., Eagle Cold and Farglory FTZ go up and down completely randomly.

Pair Corralation between Eagle Cold and Farglory FTZ

Assuming the 90 days trading horizon Eagle Cold Storage is expected to generate 0.59 times more return on investment than Farglory FTZ. However, Eagle Cold Storage is 1.68 times less risky than Farglory FTZ. It trades about 0.29 of its potential returns per unit of risk. Farglory FTZ Investment is currently generating about -0.32 per unit of risk. If you would invest  2,980  in Eagle Cold Storage on October 11, 2024 and sell it today you would earn a total of  180.00  from holding Eagle Cold Storage or generate 6.04% return on investment over 90 days.

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

Eagle Cold Storage  vs.  Farglory FTZ Investment

Eagle Cold Storage

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Cold Storage are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Eagle Cold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Farglory FTZ Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Farglory FTZ Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Eagle Cold and Farglory FTZ

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

The idea behind Eagle Cold Storage and Farglory FTZ Investment 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.