Correlation Between Eisai and GOING PUBL

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

By analyzing existing cross correlation between Eisai Co and GOING PUBL MEDIA, you can compare the effects of market volatilities on Eisai and GOING PUBL 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 Eisai with a short position of GOING PUBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eisai and GOING PUBL.

Diversification Opportunities for Eisai and GOING PUBL

0.84

Correlation Coefficient

Eisai  GOING PUBL

Very poor diversification

The 3 months correlation between Eisai and GOING is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eisai Co and GOING PUBL MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOING PUBL MEDIA and Eisai 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 Eisai Co are associated (or correlated) with GOING PUBL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOING PUBL MEDIA has no effect on the direction of Eisai i.e., Eisai and GOING PUBL go up and down completely randomly.

Pair Corralation between Eisai and GOING PUBL

Assuming the 90 days horizon Eisai Co is expected to under-perform the GOING PUBL. In addition to that, Eisai is 1.21 times more volatile than GOING PUBL MEDIA. It trades about -0.08 of its total potential returns per unit of risk. GOING PUBL MEDIA is currently generating about -0.02 per unit of volatility. If you would invest  483.00  in GOING PUBL MEDIA on October 3, 2024 and sell it today you would lose (81.00) from holding GOING PUBL MEDIA or give up 16.77% of portfolio value over 90 days.

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

Eisai Co  vs.  GOING PUBL MEDIA

Eisai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eisai Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GOING PUBL MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOING PUBL MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Eisai and GOING PUBL

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

The idea behind Eisai Co and GOING PUBL MEDIA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.