Correlation Between Eastern Technical and SPCG Public
Can any of the company-specific risk be diversified away by investing in both Eastern Technical and SPCG Public 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 Technical and SPCG Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Technical Engineering and SPCG Public, you can compare the effects of market volatilities on Eastern Technical and SPCG Public 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 Technical with a short position of SPCG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Technical and SPCG Public.
Diversification Opportunities for Eastern Technical and SPCG Public
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastern and SPCG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Technical Engineering and SPCG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPCG Public and Eastern Technical 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 Technical Engineering are associated (or correlated) with SPCG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPCG Public has no effect on the direction of Eastern Technical i.e., Eastern Technical and SPCG Public go up and down completely randomly.
Pair Corralation between Eastern Technical and SPCG Public
Assuming the 90 days trading horizon Eastern Technical Engineering is expected to under-perform the SPCG Public. In addition to that, Eastern Technical is 1.98 times more volatile than SPCG Public. It trades about -0.11 of its total potential returns per unit of risk. SPCG Public is currently generating about -0.06 per unit of volatility. If you would invest 850.00 in SPCG Public on December 2, 2024 and sell it today you would lose (40.00) from holding SPCG Public or give up 4.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Eastern Technical Engineering vs. SPCG Public
Performance |
Timeline |
Eastern Technical |
SPCG Public |
Eastern Technical and SPCG Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eastern Technical and SPCG Public
The main advantage of trading using opposite Eastern Technical and SPCG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Technical position performs unexpectedly, SPCG Public 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 SPCG Public will offset losses from the drop in SPCG Public's long position.Eastern Technical vs. G Capital Public | Eastern Technical vs. Harn Engineering Solutions | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek Public |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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