Correlation Between Eastside Distilling and Intuit

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

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

Diversification Opportunities for Eastside Distilling and Intuit

0.41

Correlation Coefficient

Eastside Distilling  Intuit

Very weak diversification

The 3 months correlation between Eastside and Intuit is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eastside Distilling and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and Eastside Distilling 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 Eastside Distilling are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Eastside Distilling i.e., Eastside Distilling and Intuit go up and down completely randomly.

Pair Corralation between Eastside Distilling and Intuit

Given the investment horizon of 90 days Eastside Distilling is expected to generate 6.47 times more return on investment than Intuit. However, Eastside Distilling is 6.47 times more volatile than Intuit Inc. It trades about 0.06 of its potential returns per unit of risk. Intuit Inc is currently generating about -0.18 per unit of risk. If you would invest  103.00  in Eastside Distilling on January 24, 2024 and sell it today you would earn a total of  5.00  from holding Eastside Distilling or generate 4.85% return on investment over 90 days.

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

Eastside Distilling  vs.  Intuit Inc

Eastside Distilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastside Distilling has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eastside Distilling is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Intuit Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eastside Distilling and Intuit

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

The idea behind Eastside Distilling and Intuit Inc 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.