Correlation Between East West and Jolliville Holdings

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

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

Diversification Opportunities for East West and Jolliville Holdings

0.0

Correlation Coefficient

East West  Jolliville Holdings

Pay attention - limited upside

The 3 months correlation between East and Jolliville is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East West Banking and Jolliville Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jolliville Holdings Corp and East West 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 East West Banking are associated (or correlated) with Jolliville Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jolliville Holdings Corp has no effect on the direction of East West i.e., East West and Jolliville Holdings go up and down completely randomly.

Pair Corralation between East West and Jolliville Holdings

If you would invest  607.00  in East West Banking on September 21, 2024 and sell it today you would earn a total of  363.00  from holding East West Banking or generate 59.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

East West Banking  vs.  Jolliville Holdings Corp

East West Banking

Risk-Adjusted Performance

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Modest

Over the last 90 days East West Banking has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, East West is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Jolliville Holdings Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Jolliville Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Jolliville Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with East West and Jolliville Holdings

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

The idea behind East West Banking and Jolliville Holdings Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.