Correlation Between ChampionX and Elutia
Can any of the company-specific risk be diversified away by investing in both ChampionX and Elutia 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 ChampionX and Elutia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Elutia Inc, you can compare the effects of market volatilities on ChampionX and Elutia 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 ChampionX with a short position of Elutia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Elutia.
Diversification Opportunities for ChampionX and Elutia
Significant diversification
The 3 months correlation between ChampionX and Elutia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc and ChampionX 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 ChampionX are associated (or correlated) with Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of ChampionX i.e., ChampionX and Elutia go up and down completely randomly.
Pair Corralation between ChampionX and Elutia
Considering the 90-day investment horizon ChampionX is expected to generate 0.43 times more return on investment than Elutia. However, ChampionX is 2.3 times less risky than Elutia. It trades about 0.04 of its potential returns per unit of risk. Elutia Inc is currently generating about -0.01 per unit of risk. If you would invest 2,833 in ChampionX on September 12, 2024 and sell it today you would earn a total of 124.00 from holding ChampionX or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Elutia Inc
Performance |
| Timeline |
| ChampionX |
| Elutia Inc |
ChampionX and Elutia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Elutia
The main advantage of trading using opposite ChampionX and Elutia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Elutia 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 Elutia will offset losses from the drop in Elutia's long position.| ChampionX vs. Newpark Resources | ChampionX vs. Tenaris SA ADR | ChampionX vs. Dawson Geophysical | ChampionX vs. Bristow Group |
| Elutia vs. Compania Cervecerias Unidas | Elutia vs. Keurig Dr Pepper | Elutia vs. ScanSource | Elutia vs. Scandinavian Tobacco 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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