Correlation Between Elis SA and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both Elis SA and HYDROFARM HLD 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 HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elis SA and HYDROFARM HLD GRP, you can compare the effects of market volatilities on Elis SA and HYDROFARM HLD 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 HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and HYDROFARM HLD.
Diversification Opportunities for Elis SA and HYDROFARM HLD
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elis and HYDROFARM is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP 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 HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of Elis SA i.e., Elis SA and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between Elis SA and HYDROFARM HLD
Assuming the 90 days horizon Elis SA is expected to under-perform the HYDROFARM HLD. But the stock apears to be less risky and, when comparing its historical volatility, Elis SA is 3.74 times less risky than HYDROFARM HLD. The stock trades about -0.11 of its potential returns per unit of risk. The HYDROFARM HLD GRP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 62.00 in HYDROFARM HLD GRP on August 31, 2024 and sell it today you would earn a total of 14.00 from holding HYDROFARM HLD GRP or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Elis SA vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| Elis SA |
| HYDROFARM HLD GRP |
Elis SA and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elis SA and HYDROFARM HLD
The main advantage of trading using opposite Elis SA and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| Elis SA vs. CECO ENVIRONMENTAL | Elis SA vs. Insteel Industries | Elis SA vs. RELIANCE STEEL AL | Elis SA vs. LION ONE METALS |
| HYDROFARM HLD vs. Sunstone Hotel Investors | HYDROFARM HLD vs. Wyndham Hotels Resorts | HYDROFARM HLD vs. Playa Hotels Resorts | HYDROFARM HLD vs. DALATA HOTEL |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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