Correlation Between EOS and Fwog

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

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

Diversification Opportunities for EOS and Fwog

0.14

Correlation Coefficient

EOS  Fwog

Average diversification

The 3 months correlation between EOS and Fwog is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding EOS and Fwog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fwog and EOS 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 EOS are associated (or correlated) with Fwog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fwog has no effect on the direction of EOS i.e., EOS and Fwog go up and down completely randomly.

Pair Corralation between EOS and Fwog

Assuming the 90 days trading horizon EOS is expected to generate 30.74 times less return on investment than Fwog. But when comparing it to its historical volatility, EOS is 13.21 times less risky than Fwog. It trades about 0.04 of its potential returns per unit of risk. Fwog is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Fwog on October 5, 2024 and sell it today you would earn a total of  28.00  from holding Fwog or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.78%
Values	Daily Returns

EOS  vs.  Fwog

EOS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EOS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EOS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fwog

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fwog are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Fwog exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EOS and Fwog

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

The idea behind EOS and Fwog 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..