Correlation Between EAST Old and Iconic Brands

Can any of the company-specific risk be diversified away by investing in both EAST Old and Iconic Brands 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 Old and Iconic Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EAST Old and Iconic Brands, you can compare the effects of market volatilities on EAST Old and Iconic Brands 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 Old with a short position of Iconic Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAST Old and Iconic Brands.

Diversification Opportunities for EAST Old and Iconic Brands

0.0

Correlation Coefficient

EAST Old  Iconic Brands

Pay attention - limited upside

The 3 months correlation between EAST and Iconic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EAST Old and Iconic Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iconic Brands and EAST Old 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 Old are associated (or correlated) with Iconic Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iconic Brands has no effect on the direction of EAST Old i.e., EAST Old and Iconic Brands go up and down completely randomly.

Pair Corralation between EAST Old and Iconic Brands

If you would invest  0.01  in Iconic Brands on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Iconic Brands or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EAST Old  vs.  Iconic Brands

EAST Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days EAST Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EAST Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Iconic Brands

Risk-Adjusted Performance

Very Weak

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

Pair Trading with EAST Old and Iconic Brands

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

The idea behind EAST Old and Iconic Brands 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..