Correlation Between Wizz Air and Eastinco Mining

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

By analyzing existing cross correlation between Wizz Air Holdings and Eastinco Mining Exploration, you can compare the effects of market volatilities on Wizz Air and Eastinco Mining 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 Wizz Air with a short position of Eastinco Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Eastinco Mining.

Diversification Opportunities for Wizz Air and Eastinco Mining

-0.48

Correlation Coefficient

Wizz Air  Eastinco Mining

Very good diversification

The 3 months correlation between Wizz and Eastinco is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Eastinco Mining Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastinco Mining Expl and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with Eastinco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastinco Mining Expl has no effect on the direction of Wizz Air i.e., Wizz Air and Eastinco Mining go up and down completely randomly.

Pair Corralation between Wizz Air and Eastinco Mining

Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Eastinco Mining. But the stock apears to be less risky and, when comparing its historical volatility, Wizz Air Holdings is 89.06 times less risky than Eastinco Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Eastinco Mining Exploration is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  9,500  in Eastinco Mining Exploration on September 3, 2024 and sell it today you would lose (4,400) from holding Eastinco Mining Exploration or give up 46.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Wizz Air Holdings  vs.  Eastinco Mining Exploration

Wizz Air Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Wizz Air is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Wizz Air and Eastinco Mining

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

The idea behind Wizz Air Holdings and Eastinco Mining Exploration 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 Stocks Directory module to find actively traded stocks across global markets.