Correlation Between Alumil Aluminium and Elton International
Can any of the company-specific risk be diversified away by investing in both Alumil Aluminium and Elton International 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 Alumil Aluminium and Elton International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumil Aluminium Industry and Elton International Trading, you can compare the effects of market volatilities on Alumil Aluminium and Elton International 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 Alumil Aluminium with a short position of Elton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumil Aluminium and Elton International.
Diversification Opportunities for Alumil Aluminium and Elton International
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alumil and Elton is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Alumil Aluminium Industry and Elton International Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elton International and Alumil Aluminium 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 Alumil Aluminium Industry are associated (or correlated) with Elton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elton International has no effect on the direction of Alumil Aluminium i.e., Alumil Aluminium and Elton International go up and down completely randomly.
Pair Corralation between Alumil Aluminium and Elton International
Assuming the 90 days trading horizon Alumil Aluminium Industry is expected to generate 1.2 times more return on investment than Elton International. However, Alumil Aluminium is 1.2 times more volatile than Elton International Trading. It trades about 0.08 of its potential returns per unit of risk. Elton International Trading is currently generating about -0.03 per unit of risk. If you would invest 280.00 in Alumil Aluminium Industry on September 3, 2024 and sell it today you would earn a total of 118.00 from holding Alumil Aluminium Industry or generate 42.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alumil Aluminium Industry vs. Elton International Trading
Performance |
| Timeline |
| Alumil Aluminium Industry |
| Elton International |
Alumil Aluminium and Elton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumil Aluminium and Elton International
The main advantage of trading using opposite Alumil Aluminium and Elton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumil Aluminium position performs unexpectedly, Elton International 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 Elton International will offset losses from the drop in Elton International's long position.| Alumil Aluminium vs. Hellenic Petroleum SA | Alumil Aluminium vs. Mytilineos SA | Alumil Aluminium vs. GEK TERNA Holdings | Alumil Aluminium vs. Aegean Airlines SA |
| Elton International vs. Autohellas SA | Elton International vs. Admie Holding SA | Elton International vs. Hellenic Petroleum SA | Elton International vs. Jumbo SA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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