Correlation Between YHC and Eastside Distilling

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

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

Diversification Opportunities for YHC and Eastside Distilling

0.68

Correlation Coefficient

YHC  Eastside Distilling

Poor diversification

The 3 months correlation between YHC and Eastside is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding YHC and Eastside Distilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastside Distilling and YHC 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 YHC are associated (or correlated) with Eastside Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastside Distilling has no effect on the direction of YHC i.e., YHC and Eastside Distilling go up and down completely randomly.

Pair Corralation between YHC and Eastside Distilling

Considering the 90-day investment horizon YHC is expected to under-perform the Eastside Distilling. In addition to that, YHC is 1.11 times more volatile than Eastside Distilling. It trades about -0.07 of its total potential returns per unit of risk. Eastside Distilling is currently generating about 0.0 per unit of volatility. If you would invest  540.00  in Eastside Distilling on October 8, 2024 and sell it today you would lose (457.00) from holding Eastside Distilling or give up 84.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	71.37%
Values	Daily Returns

YHC  vs.  Eastside Distilling

YHC

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in YHC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, YHC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Eastside Distilling

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eastside Distilling are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eastside Distilling unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with YHC and Eastside Distilling

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

The idea behind YHC and Eastside Distilling 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.