Correlation Between Eastinco Mining and AstraZeneca PLC

Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and AstraZeneca PLC 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 Eastinco Mining and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastinco Mining Exploration and AstraZeneca PLC, you can compare the effects of market volatilities on Eastinco Mining and AstraZeneca PLC 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 Eastinco Mining with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and AstraZeneca PLC.

Diversification Opportunities for Eastinco Mining and AstraZeneca PLC

0.23

Correlation Coefficient

Eastinco Mining  AstraZeneca PLC

Modest diversification

The 3 months correlation between Eastinco and AstraZeneca is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and Eastinco Mining 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 Eastinco Mining Exploration are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and AstraZeneca PLC go up and down completely randomly.

Pair Corralation between Eastinco Mining and AstraZeneca PLC

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 202.11 times more return on investment than AstraZeneca PLC. However, Eastinco Mining is 202.11 times more volatile than AstraZeneca PLC. It trades about 0.27 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about 0.02 per unit of risk. If you would invest  0.83  in Eastinco Mining Exploration on October 26, 2024 and sell it today you would earn a total of  5,399  from holding Eastinco Mining Exploration or generate 650502.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Eastinco Mining Exploration  vs.  AstraZeneca PLC

Eastinco Mining Expl

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastinco Mining Exploration are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Eastinco Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AstraZeneca PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AstraZeneca PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AstraZeneca PLC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eastinco Mining and AstraZeneca PLC

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

The idea behind Eastinco Mining Exploration and AstraZeneca PLC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.