Correlation Between RELIANCE and East West
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By analyzing existing cross correlation between RELIANCE STL ALUM and East West Bancorp, you can compare the effects of market volatilities on RELIANCE 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 RELIANCE with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of RELIANCE and East West.
Diversification Opportunities for RELIANCE and East West
Very weak diversification
The 3 months correlation between RELIANCE and East is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding RELIANCE STL ALUM 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 RELIANCE 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 RELIANCE STL ALUM 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 RELIANCE i.e., RELIANCE and East West go up and down completely randomly.
Pair Corralation between RELIANCE and East West
Assuming the 90 days trading horizon RELIANCE STL ALUM is expected to under-perform the East West. In addition to that, RELIANCE is 1.52 times more volatile than East West Bancorp. It trades about -0.45 of its total potential returns per unit of risk. East West Bancorp is currently generating about -0.26 per unit of volatility. If you would invest 10,361 in East West Bancorp on October 11, 2024 and sell it today you would lose (826.00) from holding East West Bancorp or give up 7.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 19.05% |
Values | Daily Returns |
RELIANCE STL ALUM vs. East West Bancorp
Performance |
Timeline |
RELIANCE STL ALUM |
East West Bancorp |
RELIANCE and East West Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RELIANCE and East West
The main advantage of trading using opposite RELIANCE and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RELIANCE 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.RELIANCE vs. East West Bancorp | RELIANCE vs. Cheche Group Class | RELIANCE vs. Wabash National | RELIANCE vs. Encore Capital Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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