Correlation Between INTNED and Eastern

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

By analyzing existing cross correlation between INTNED 575 and Eastern Co, you can compare the effects of market volatilities on INTNED and Eastern 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 INTNED with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Eastern.

Diversification Opportunities for INTNED and Eastern

0.29

Correlation Coefficient

INTNED  Eastern

Modest diversification

The 3 months correlation between INTNED and Eastern is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 575 and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and INTNED 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 INTNED 575 are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of INTNED i.e., INTNED and Eastern go up and down completely randomly.

Pair Corralation between INTNED and Eastern

Assuming the 90 days trading horizon INTNED 575 is expected to under-perform the Eastern. But the bond apears to be less risky and, when comparing its historical volatility, INTNED 575 is 1.71 times less risky than Eastern. The bond trades about -0.27 of its potential returns per unit of risk. The Eastern Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,812  in Eastern Co on September 26, 2024 and sell it today you would lose (71.00) from holding Eastern Co or give up 2.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	47.62%
Values	Daily Returns

INTNED 575  vs.  Eastern Co

INTNED 575

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INTNED 575 investors.

Eastern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with INTNED and Eastern

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

The idea behind INTNED 575 and Eastern Co 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.