Correlation Between Tyson Foods and East West
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and East West 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 Tyson Foods and East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and East West Bancorp, you can compare the effects of market volatilities on Tyson Foods and East West 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 Tyson Foods with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and East West.
Diversification Opportunities for Tyson Foods and East West
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tyson and East is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and East West Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Bancorp and Tyson Foods 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 Tyson Foods are associated (or correlated) with East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Bancorp has no effect on the direction of Tyson Foods i.e., Tyson Foods and East West go up and down completely randomly.
Pair Corralation between Tyson Foods and East West
Considering the 90-day investment horizon Tyson Foods is expected to generate 0.84 times more return on investment than East West. However, Tyson Foods is 1.19 times less risky than East West. It trades about 0.05 of its potential returns per unit of risk. East West Bancorp is currently generating about -0.06 per unit of risk. If you would invest 5,848 in Tyson Foods on December 18, 2024 and sell it today you would earn a total of 211.00 from holding Tyson Foods or generate 3.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tyson Foods vs. East West Bancorp
Performance |
Timeline |
Tyson Foods |
East West Bancorp |
Tyson Foods and East West Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tyson Foods and East West
The main advantage of trading using opposite Tyson Foods and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
East West vs. Barclays PLC ADR | East West vs. UBS Group AG | East West vs. ING Group NV | East West vs. Citigroup |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |