Correlation Between EAT WELL and DevEx Resources

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

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

Diversification Opportunities for EAT WELL and DevEx Resources

0.0

Correlation Coefficient

EAT WELL  DevEx Resources

Pay attention - limited upside

The 3 months correlation between EAT and DevEx is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EAT WELL INVESTMENT and DevEx Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevEx Resources and EAT WELL 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 EAT WELL INVESTMENT are associated (or correlated) with DevEx Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevEx Resources has no effect on the direction of EAT WELL i.e., EAT WELL and DevEx Resources go up and down completely randomly.

Pair Corralation between EAT WELL and DevEx Resources

Assuming the 90 days trading horizon EAT WELL is expected to generate 64.58 times less return on investment than DevEx Resources. But when comparing it to its historical volatility, EAT WELL INVESTMENT is 3.01 times less risky than DevEx Resources. It trades about 0.0 of its potential returns per unit of risk. DevEx Resources Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  16.00  in DevEx Resources Limited on September 13, 2024 and sell it today you would lose (10.50) from holding DevEx Resources Limited or give up 65.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

EAT WELL INVESTMENT  vs.  DevEx Resources Limited

EAT WELL INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAT WELL INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, EAT WELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

DevEx Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DevEx Resources Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DevEx Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EAT WELL and DevEx Resources

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

The idea behind EAT WELL INVESTMENT and DevEx Resources Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.