Correlation Between International Zeolite and Eastwood Bio

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

By analyzing existing cross correlation between International Zeolite Corp and Eastwood Bio Medical Canada, you can compare the effects of market volatilities on International Zeolite and Eastwood Bio 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 International Zeolite with a short position of Eastwood Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Zeolite and Eastwood Bio.

Diversification Opportunities for International Zeolite and Eastwood Bio

0.31

Correlation Coefficient

International Zeolite  Eastwood Bio

Weak diversification

The 3 months correlation between International and Eastwood is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding International Zeolite Corp and Eastwood Bio Medical Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastwood Bio Medical and International Zeolite 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 International Zeolite Corp are associated (or correlated) with Eastwood Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastwood Bio Medical has no effect on the direction of International Zeolite i.e., International Zeolite and Eastwood Bio go up and down completely randomly.

Pair Corralation between International Zeolite and Eastwood Bio

Given the investment horizon of 90 days International Zeolite Corp is expected to under-perform the Eastwood Bio. In addition to that, International Zeolite is 1.29 times more volatile than Eastwood Bio Medical Canada. It trades about -0.05 of its total potential returns per unit of risk. Eastwood Bio Medical Canada is currently generating about 0.01 per unit of volatility. If you would invest  75.00  in Eastwood Bio Medical Canada on December 1, 2024 and sell it today you would lose (16.00) from holding Eastwood Bio Medical Canada or give up 21.33% of portfolio value over 90 days.

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

International Zeolite Corp  vs.  Eastwood Bio Medical Canada

International Zeolite

Risk-Adjusted Performance

Very Weak

Over the last 90 days International Zeolite Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Eastwood Bio Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eastwood Bio Medical Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Eastwood Bio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with International Zeolite and Eastwood Bio

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

The idea behind International Zeolite Corp and Eastwood Bio Medical Canada 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..