Correlation Between East Side and Dividend Growth

Can any of the company-specific risk be diversified away by investing in both East Side and Dividend Growth 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 East Side and Dividend Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between East Side Games and Dividend Growth Split, you can compare the effects of market volatilities on East Side and Dividend Growth 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 East Side with a short position of Dividend Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and Dividend Growth.

Diversification Opportunities for East Side and Dividend Growth

-0.6

Correlation Coefficient

East Side  Dividend Growth

Excellent diversification

The 3 months correlation between East and Dividend is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games and Dividend Growth Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend Growth Split and East Side 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 East Side Games are associated (or correlated) with Dividend Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend Growth Split has no effect on the direction of East Side i.e., East Side and Dividend Growth go up and down completely randomly.

Pair Corralation between East Side and Dividend Growth

Assuming the 90 days trading horizon East Side Games is expected to under-perform the Dividend Growth. In addition to that, East Side is 7.55 times more volatile than Dividend Growth Split. It trades about -0.07 of its total potential returns per unit of risk. Dividend Growth Split is currently generating about 0.0 per unit of volatility. If you would invest  1,062  in Dividend Growth Split on December 23, 2024 and sell it today you would lose (3.00) from holding Dividend Growth Split or give up 0.28% of portfolio value over 90 days.

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

East Side Games  vs.  Dividend Growth Split

East Side Games

Risk-Adjusted Performance

Very Weak

Over the last 90 days East Side Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dividend Growth Split

Risk-Adjusted Performance

Very Weak

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

Pair Trading with East Side and Dividend Growth

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

The idea behind East Side Games and Dividend Growth Split 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.