Correlation Between EOSDAC and RATING

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

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

Diversification Opportunities for EOSDAC and RATING

0.38

Correlation Coefficient

EOSDAC  RATING

Weak diversification

The 3 months correlation between EOSDAC and RATING is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding EOSDAC and RATING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATING and EOSDAC 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 EOSDAC are associated (or correlated) with RATING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATING has no effect on the direction of EOSDAC i.e., EOSDAC and RATING go up and down completely randomly.

Pair Corralation between EOSDAC and RATING

Assuming the 90 days trading horizon EOSDAC is expected to generate 1.4 times more return on investment than RATING. However, EOSDAC is 1.4 times more volatile than RATING. It trades about 0.08 of its potential returns per unit of risk. RATING is currently generating about 0.08 per unit of risk. If you would invest  0.02  in EOSDAC on April 9, 2025 and sell it today you would earn a total of  0.00  from holding EOSDAC or generate 17.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

EOSDAC  vs.  RATING

EOSDAC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EOSDAC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, EOSDAC sustained solid returns over the last few months and may actually be approaching a breakup point.

RATING

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RATING are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, RATING sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EOSDAC and RATING

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

The idea behind EOSDAC and RATING 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.