Correlation Between Daios Plastics and Elastron
Can any of the company-specific risk be diversified away by investing in both Daios Plastics and Elastron 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 Daios Plastics and Elastron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daios Plastics SA and Elastron SA , you can compare the effects of market volatilities on Daios Plastics and Elastron 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 Daios Plastics with a short position of Elastron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daios Plastics and Elastron.
Diversification Opportunities for Daios Plastics and Elastron
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daios and Elastron is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Daios Plastics SA and Elastron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elastron SA and Daios Plastics 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 Daios Plastics SA are associated (or correlated) with Elastron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elastron SA has no effect on the direction of Daios Plastics i.e., Daios Plastics and Elastron go up and down completely randomly.
Pair Corralation between Daios Plastics and Elastron
Assuming the 90 days trading horizon Daios Plastics SA is expected to generate 1.36 times more return on investment than Elastron. However, Daios Plastics is 1.36 times more volatile than Elastron SA . It trades about 0.02 of its potential returns per unit of risk. Elastron SA is currently generating about -0.06 per unit of risk. If you would invest 340.00 in Daios Plastics SA on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Daios Plastics SA or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daios Plastics SA vs. Elastron SA
Performance |
| Timeline |
| Daios Plastics SA |
| Elastron SA |
Daios Plastics and Elastron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daios Plastics and Elastron
The main advantage of trading using opposite Daios Plastics and Elastron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daios Plastics position performs unexpectedly, Elastron 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 Elastron will offset losses from the drop in Elastron's long position.| Daios Plastics vs. Ktima Kostas Lazaridis | Daios Plastics vs. Trastor Real Estate | Daios Plastics vs. As Commercial Industrial |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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