Correlation Between Elis SA and Transcontinental
Can any of the company-specific risk be diversified away by investing in both Elis SA and Transcontinental 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 Transcontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elis SA and Transcontinental, you can compare the effects of market volatilities on Elis SA and Transcontinental 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 Transcontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and Transcontinental.
Diversification Opportunities for Elis SA and Transcontinental
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elis and Transcontinental is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and Transcontinental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental 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 Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental has no effect on the direction of Elis SA i.e., Elis SA and Transcontinental go up and down completely randomly.
Pair Corralation between Elis SA and Transcontinental
Assuming the 90 days horizon Elis SA is expected to under-perform the Transcontinental. In addition to that, Elis SA is 1.21 times more volatile than Transcontinental. It trades about -0.02 of its total potential returns per unit of risk. Transcontinental is currently generating about 0.15 per unit of volatility. If you would invest 1,119 in Transcontinental on October 26, 2024 and sell it today you would earn a total of 91.00 from holding Transcontinental or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elis SA vs. Transcontinental
Performance |
| Timeline |
| Elis SA |
| Transcontinental |
Elis SA and Transcontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elis SA and Transcontinental
The main advantage of trading using opposite Elis SA and Transcontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA position performs unexpectedly, Transcontinental 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 Transcontinental will offset losses from the drop in Transcontinental's long position.| Elis SA vs. VULCAN MATERIALS | Elis SA vs. Plastic Omnium | Elis SA vs. ULTRA CLEAN HLDGS | Elis SA vs. Heidelberg Materials AG |
| Transcontinental vs. AGNC INVESTMENT | Transcontinental vs. WILLIS LEASE FIN | Transcontinental vs. Japan Asia Investment | Transcontinental vs. Lendlease Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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