Correlation Between Eddy Smart and Millbank Mining

Can any of the company-specific risk be diversified away by investing in both Eddy Smart and Millbank Mining 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 Eddy Smart and Millbank Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eddy Smart Home and Millbank Mining Corp, you can compare the effects of market volatilities on Eddy Smart and Millbank Mining 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 Eddy Smart with a short position of Millbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eddy Smart and Millbank Mining.

Diversification Opportunities for Eddy Smart and Millbank Mining

0.22

Correlation Coefficient

Eddy Smart  Millbank Mining

Modest diversification

The 3 months correlation between Eddy and Millbank is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Eddy Smart Home and Millbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millbank Mining Corp and Eddy Smart 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 Eddy Smart Home are associated (or correlated) with Millbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millbank Mining Corp has no effect on the direction of Eddy Smart i.e., Eddy Smart and Millbank Mining go up and down completely randomly.

Pair Corralation between Eddy Smart and Millbank Mining

Assuming the 90 days horizon Eddy Smart Home is expected to generate 2.19 times more return on investment than Millbank Mining. However, Eddy Smart is 2.19 times more volatile than Millbank Mining Corp. It trades about 0.02 of its potential returns per unit of risk. Millbank Mining Corp is currently generating about 0.01 per unit of risk. If you would invest  240.00  in Eddy Smart Home on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Eddy Smart Home or generate 0.0% return on investment over 90 days.

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

Eddy Smart Home  vs.  Millbank Mining Corp

Eddy Smart Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eddy Smart Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Millbank Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Eddy Smart and Millbank Mining

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

The idea behind Eddy Smart Home and Millbank Mining 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.