Correlation Between Eastern and Viking Holdings

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

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

Diversification Opportunities for Eastern and Viking Holdings

-0.68

Correlation Coefficient

Eastern  Viking Holdings

Excellent diversification

The 3 months correlation between Eastern and Viking is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Viking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Holdings and Eastern 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 Eastern Co are associated (or correlated) with Viking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Holdings has no effect on the direction of Eastern i.e., Eastern and Viking Holdings go up and down completely randomly.

Pair Corralation between Eastern and Viking Holdings

Considering the 90-day investment horizon Eastern is expected to generate 2.3 times less return on investment than Viking Holdings. In addition to that, Eastern is 1.26 times more volatile than Viking Holdings. It trades about 0.05 of its total potential returns per unit of risk. Viking Holdings is currently generating about 0.16 per unit of volatility. If you would invest  2,610  in Viking Holdings on October 22, 2024 and sell it today you would earn a total of  2,161  from holding Viking Holdings or generate 82.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	46.29%
Values	Daily Returns

Eastern Co  vs.  Viking Holdings

Eastern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Viking Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viking Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating forward indicators, Viking Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eastern and Viking Holdings

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

The idea behind Eastern Co and Viking Holdings 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.