Correlation Between East West and Hanger
Can any of the company-specific risk be diversified away by investing in both East West and Hanger 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 Hanger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Bancorp and Hanger Inc, you can compare the effects of market volatilities on East West and Hanger 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 Hanger. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Hanger.
Diversification Opportunities for East West and Hanger
Pay attention - limited upside
The 3 months correlation between East and Hanger is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East West Bancorp and Hanger Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanger Inc 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 Bancorp are associated (or correlated) with Hanger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanger Inc has no effect on the direction of East West i.e., East West and Hanger go up and down completely randomly.
Pair Corralation between East West and Hanger
If you would invest (100.00) in Hanger Inc on December 18, 2024 and sell it today you would earn a total of 100.00 from holding Hanger Inc or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
East West Bancorp vs. Hanger Inc
Performance |
Timeline |
East West Bancorp |
Hanger Inc |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
East West and Hanger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with East West and Hanger
The main advantage of trading using opposite East West and Hanger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Hanger 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 Hanger will offset losses from the drop in Hanger's long position.East West vs. Barclays PLC ADR | East West vs. UBS Group AG | East West vs. ING Group NV | East West vs. Citigroup |
Hanger vs. Sun Country Airlines | Hanger vs. Smithfield Foods, Common | Hanger vs. Nexstar Broadcasting Group | Hanger vs. Ihuman Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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