Correlation Between Ethan Allen and Petrone Worldwide
Can any of the company-specific risk be diversified away by investing in both Ethan Allen and Petrone Worldwide 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 Ethan Allen and Petrone Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethan Allen Interiors and Petrone Worldwide, you can compare the effects of market volatilities on Ethan Allen and Petrone Worldwide 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 Ethan Allen with a short position of Petrone Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethan Allen and Petrone Worldwide.
Diversification Opportunities for Ethan Allen and Petrone Worldwide
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ethan and Petrone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ethan Allen Interiors and Petrone Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrone Worldwide and Ethan Allen 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 Ethan Allen Interiors are associated (or correlated) with Petrone Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrone Worldwide has no effect on the direction of Ethan Allen i.e., Ethan Allen and Petrone Worldwide go up and down completely randomly.
Pair Corralation between Ethan Allen and Petrone Worldwide
If you would invest 0.01 in Petrone Worldwide on February 12, 2024 and sell it today you would earn a total of 0.00 from holding Petrone Worldwide or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ethan Allen Interiors vs. Petrone Worldwide
Performance |
| Timeline |
| Ethan Allen Interiors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Petrone Worldwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ethan Allen and Petrone Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethan Allen and Petrone Worldwide
The main advantage of trading using opposite Ethan Allen and Petrone Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethan Allen position performs unexpectedly, Petrone Worldwide 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 Petrone Worldwide will offset losses from the drop in Petrone Worldwide's long position.| Ethan Allen vs. Western Union Co | Ethan Allen vs. Siriuspoint | Ethan Allen vs. Alternative Investment | Ethan Allen vs. KeyCorp |
| Petrone Worldwide vs. Alaska Air Group | Petrone Worldwide vs. Vector Group | Petrone Worldwide vs. American Airlines Group | Petrone Worldwide vs. Air Transport Services |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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