Correlation Between East Side and E Split

Can any of the company-specific risk be diversified away by investing in both East Side and E Split 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 E Split 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 E Split Corp, you can compare the effects of market volatilities on East Side and E Split 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 E Split. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Side and E Split.

Diversification Opportunities for East Side and E Split

-0.47

Correlation Coefficient

East Side  E Split

Very good diversification

The 3 months correlation between East and ENS-PA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games and E Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Split Corp 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 E Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Split Corp has no effect on the direction of East Side i.e., East Side and E Split go up and down completely randomly.

Pair Corralation between East Side and E Split

Assuming the 90 days trading horizon East Side Games is expected to under-perform the E Split. In addition to that, East Side is 6.23 times more volatile than E Split Corp. It trades about -0.07 of its total potential returns per unit of risk. E Split Corp is currently generating about 0.04 per unit of volatility. If you would invest  1,118  in E Split Corp on December 23, 2024 and sell it today you would earn a total of  19.00  from holding E Split Corp or generate 1.7% return on investment over 90 days.

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

East Side Games  vs.  E Split Corp

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.

E Split Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, E Split is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with East Side and E Split

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

The idea behind East Side Games and E Split Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.