Correlation Between Eastern and A SPAC

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

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

Diversification Opportunities for Eastern and A SPAC

0.43

Correlation Coefficient

Eastern  A SPAC

Very weak diversification

The 3 months correlation between Eastern and ASPC is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and A SPAC III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC III and Eastern 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 Eastern Co are associated (or correlated) with A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC III has no effect on the direction of Eastern i.e., Eastern and A SPAC go up and down completely randomly.

Pair Corralation between Eastern and A SPAC

Considering the 90-day investment horizon Eastern is expected to generate 1.16 times less return on investment than A SPAC. In addition to that, Eastern is 13.83 times more volatile than A SPAC III. It trades about 0.01 of its total potential returns per unit of risk. A SPAC III is currently generating about 0.12 per unit of volatility. If you would invest  1,015  in A SPAC III on May 9, 2025 and sell it today you would earn a total of  11.00  from holding A SPAC III or generate 1.08% return on investment over 90 days.

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

Eastern Co  vs.  A SPAC III

Eastern

Risk-Adjusted Performance

Weakest

Over the last 90 days Eastern Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Eastern is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

A SPAC III

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in A SPAC III are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, A SPAC is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eastern and A SPAC

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

The idea behind Eastern Co and A SPAC III 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.