Correlation Between EOS and Sandbox

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

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

Diversification Opportunities for EOS and Sandbox

0.98

Correlation Coefficient

EOS  Sandbox

Almost no diversification

The 3 months correlation between EOS and Sandbox is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding EOS and The Sandbox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandbox 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 Sandbox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandbox has no effect on the direction of EOS i.e., EOS and Sandbox go up and down completely randomly.

Pair Corralation between EOS and Sandbox

Assuming the 90 days trading horizon EOS is expected to generate 1.0 times more return on investment than Sandbox. However, EOS is 1.0 times less risky than Sandbox. It trades about -0.07 of its potential returns per unit of risk. The Sandbox is currently generating about -0.17 per unit of risk. If you would invest  77.00  in EOS on December 30, 2024 and sell it today you would lose (23.00) from holding EOS or give up 29.87% of portfolio value over 90 days.

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

EOS  vs.  The Sandbox

EOS

Risk-Adjusted Performance

Very Weak

Over the last 90 days EOS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for EOS shareholders.

Sandbox

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Sandbox has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for The Sandbox shareholders.

Pair Trading with EOS and Sandbox

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

The idea behind EOS and The Sandbox 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..