Correlation Between Eastinco Mining and Eneraqua Technologies

Can any of the company-specific risk be diversified away by investing in both Eastinco Mining and Eneraqua Technologies 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 Eneraqua Technologies 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 Eneraqua Technologies PLC, you can compare the effects of market volatilities on Eastinco Mining and Eneraqua Technologies 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 Eneraqua Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Eneraqua Technologies.

Diversification Opportunities for Eastinco Mining and Eneraqua Technologies

0.32

Correlation Coefficient

Eastinco Mining  Eneraqua Technologies

Weak diversification

The 3 months correlation between Eastinco and Eneraqua is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Eneraqua Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneraqua Technologies 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 Eneraqua Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneraqua Technologies PLC has no effect on the direction of Eastinco Mining i.e., Eastinco Mining and Eneraqua Technologies go up and down completely randomly.

Pair Corralation between Eastinco Mining and Eneraqua Technologies

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 1.29 times more return on investment than Eneraqua Technologies. However, Eastinco Mining is 1.29 times more volatile than Eneraqua Technologies PLC. It trades about -0.02 of its potential returns per unit of risk. Eneraqua Technologies PLC is currently generating about -0.11 per unit of risk. If you would invest  4,550  in Eastinco Mining Exploration on December 24, 2024 and sell it today you would lose (250.00) from holding Eastinco Mining Exploration or give up 5.49% of portfolio value over 90 days.

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

Eastinco Mining Exploration  vs.  Eneraqua Technologies PLC

Eastinco Mining Expl

Risk-Adjusted Performance

Very Weak

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

Eneraqua Technologies PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eneraqua Technologies PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Eastinco Mining and Eneraqua Technologies

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

The idea behind Eastinco Mining Exploration and Eneraqua Technologies 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.