Correlation Between Brimag L and El Mor
Can any of the company-specific risk be diversified away by investing in both Brimag L and El Mor 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 Brimag L and El Mor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brimag L and El Mor Electric Installation, you can compare the effects of market volatilities on Brimag L and El Mor 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 Brimag L with a short position of El Mor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimag L and El Mor.
Diversification Opportunities for Brimag L and El Mor
Poor diversification
The 3 months correlation between Brimag and ELMR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Brimag L and El Mor Electric Installation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Mor Electric and Brimag L 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 Brimag L are associated (or correlated) with El Mor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Mor Electric has no effect on the direction of Brimag L i.e., Brimag L and El Mor go up and down completely randomly.
Pair Corralation between Brimag L and El Mor
Assuming the 90 days trading horizon Brimag L is expected to under-perform the El Mor. But the stock apears to be less risky and, when comparing its historical volatility, Brimag L is 1.74 times less risky than El Mor. The stock trades about 0.0 of its potential returns per unit of risk. The El Mor Electric Installation is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 100,400 in El Mor Electric Installation on September 3, 2024 and sell it today you would earn a total of 19,300 from holding El Mor Electric Installation or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brimag L vs. El Mor Electric Installation
Performance |
| Timeline |
| Brimag L |
| El Mor Electric |
Brimag L and El Mor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brimag L and El Mor
The main advantage of trading using opposite Brimag L and El Mor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimag L position performs unexpectedly, El Mor 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 El Mor will offset losses from the drop in El Mor's long position.| Brimag L vs. Ralco Agencies | Brimag L vs. Neto ME Holdings | Brimag L vs. Globrands Group | Brimag L vs. Nextcom |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |