Correlation Between Elis SA and Steadfast Group
Can any of the company-specific risk be diversified away by investing in both Elis SA and Steadfast Group 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 Elis SA and Steadfast Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elis SA and Steadfast Group Limited, you can compare the effects of market volatilities on Elis SA and Steadfast Group 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 Elis SA with a short position of Steadfast Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and Steadfast Group.
Diversification Opportunities for Elis SA and Steadfast Group
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elis and Steadfast is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group and Elis SA 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 Elis SA are associated (or correlated) with Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of Elis SA i.e., Elis SA and Steadfast Group go up and down completely randomly.
Pair Corralation between Elis SA and Steadfast Group
Assuming the 90 days horizon Elis SA is expected to under-perform the Steadfast Group. In addition to that, Elis SA is 2.42 times more volatile than Steadfast Group Limited. It trades about -0.14 of its total potential returns per unit of risk. Steadfast Group Limited is currently generating about -0.13 per unit of volatility. If you would invest 342.00 in Steadfast Group Limited on October 12, 2024 and sell it today you would lose (8.00) from holding Steadfast Group Limited or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elis SA vs. Steadfast Group Limited
Performance |
| Timeline |
| Elis SA |
| Steadfast Group |
Elis SA and Steadfast Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elis SA and Steadfast Group
The main advantage of trading using opposite Elis SA and Steadfast Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA position performs unexpectedly, Steadfast Group 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 Steadfast Group will offset losses from the drop in Steadfast Group's long position.| Elis SA vs. PURETECH HEALTH PLC | Elis SA vs. Commonwealth Bank of | Elis SA vs. NIGHTINGALE HEALTH EO | Elis SA vs. BANKINTER ADR 2007 |
| Steadfast Group vs. Brown Brown | Steadfast Group vs. Sabre Insurance Group | Steadfast Group vs. Superior Plus Corp | Steadfast Group vs. NMI Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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