Correlation Between Consumer Portfolio and Eastern

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

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

Diversification Opportunities for Consumer Portfolio and Eastern

0.54

Correlation Coefficient

Consumer Portfolio  Eastern

Very weak diversification

The 3 months correlation between Consumer and Eastern is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Portfolio Services and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Consumer Portfolio 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 Consumer Portfolio Services are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Consumer Portfolio i.e., Consumer Portfolio and Eastern go up and down completely randomly.

Pair Corralation between Consumer Portfolio and Eastern

Given the investment horizon of 90 days Consumer Portfolio Services is expected to under-perform the Eastern. In addition to that, Consumer Portfolio is 1.0 times more volatile than Eastern Co. It trades about -0.06 of its total potential returns per unit of risk. Eastern Co is currently generating about 0.08 per unit of volatility. If you would invest  2,057  in Eastern Co on May 2, 2025 and sell it today you would earn a total of  220.00  from holding Eastern Co or generate 10.7% return on investment over 90 days.

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

Consumer Portfolio Services  vs.  Eastern Co

Consumer Portfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Consumer Portfolio Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Eastern

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eastern Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain primary indicators, Eastern may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Consumer Portfolio and Eastern

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

The idea behind Consumer Portfolio Services and Eastern Co 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.