Correlation Between Eastwood Bio and Exchange Income

Can any of the company-specific risk be diversified away by investing in both Eastwood Bio and Exchange Income 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 Eastwood Bio and Exchange Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastwood Bio Medical Canada and Exchange Income, you can compare the effects of market volatilities on Eastwood Bio and Exchange Income 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 Eastwood Bio with a short position of Exchange Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio and Exchange Income.

Diversification Opportunities for Eastwood Bio and Exchange Income

0.33

Correlation Coefficient

Eastwood Bio  Exchange Income

Weak diversification

The 3 months correlation between Eastwood and Exchange is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and Exchange Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Income and Eastwood Bio 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 Eastwood Bio Medical Canada are associated (or correlated) with Exchange Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Income has no effect on the direction of Eastwood Bio i.e., Eastwood Bio and Exchange Income go up and down completely randomly.

Pair Corralation between Eastwood Bio and Exchange Income

Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 8.14 times more return on investment than Exchange Income. However, Eastwood Bio is 8.14 times more volatile than Exchange Income. It trades about 0.0 of its potential returns per unit of risk. Exchange Income is currently generating about -0.14 per unit of risk. If you would invest  54.00  in Eastwood Bio Medical Canada on December 22, 2024 and sell it today you would lose (14.00) from holding Eastwood Bio Medical Canada or give up 25.93% of portfolio value over 90 days.

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

Eastwood Bio Medical Canada  vs.  Exchange Income

Eastwood Bio Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastwood Bio Medical Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Eastwood Bio is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Exchange Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exchange Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Eastwood Bio and Exchange Income

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

The idea behind Eastwood Bio Medical Canada and Exchange Income 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.