Correlation Between Elis SA and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Elis SA and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elis SA and WIMFARM SA EO, you can compare the effects of market volatilities on Elis SA and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and WIMFARM SA.
Diversification Opportunities for Elis SA and WIMFARM SA
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elis and WIMFARM is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Elis SA i.e., Elis SA and WIMFARM SA go up and down completely randomly.
Pair Corralation between Elis SA and WIMFARM SA
Assuming the 90 days horizon Elis SA is expected to generate 0.59 times more return on investment than WIMFARM SA. However, Elis SA is 1.7 times less risky than WIMFARM SA. It trades about -0.06 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.06 per unit of risk. If you would invest 2,332 in Elis SA on August 31, 2024 and sell it today you would lose (411.00) from holding Elis SA or give up 17.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Elis SA vs. WIMFARM SA EO
Performance |
| Timeline |
| Elis SA |
| WIMFARM SA EO |
Elis SA and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elis SA and WIMFARM SA
The main advantage of trading using opposite Elis SA and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elis SA position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA'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 |
| WIMFARM SA vs. Eastman Chemical | WIMFARM SA vs. Dave Busters Entertainment | WIMFARM SA vs. WILLIS LEASE FIN | WIMFARM SA vs. ATRESMEDIA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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