Correlation Between Ellington Financial and 17 Education
Can any of the company-specific risk be diversified away by investing in both Ellington Financial and 17 Education 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 Ellington Financial and 17 Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellington Financial and 17 Education Technology, you can compare the effects of market volatilities on Ellington Financial and 17 Education 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 Ellington Financial with a short position of 17 Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellington Financial and 17 Education.
Diversification Opportunities for Ellington Financial and 17 Education
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ellington and 17 Education is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ellington Financial and 17 Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 17 Education Technology and Ellington Financial 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 Ellington Financial are associated (or correlated) with 17 Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 17 Education Technology has no effect on the direction of Ellington Financial i.e., Ellington Financial and 17 Education go up and down completely randomly.
Pair Corralation between Ellington Financial and 17 Education
Assuming the 90 days trading horizon Ellington Financial is expected to generate 0.04 times more return on investment than 17 Education. However, Ellington Financial is 25.57 times less risky than 17 Education. It trades about 0.27 of its potential returns per unit of risk. 17 Education Technology is currently generating about -0.24 per unit of risk. If you would invest 2,542 in Ellington Financial on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Ellington Financial or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellington Financial vs. 17 Education Technology
Performance |
| Timeline |
| Ellington Financial |
| 17 Education Technology |
Ellington Financial and 17 Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellington Financial and 17 Education
The main advantage of trading using opposite Ellington Financial and 17 Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellington Financial position performs unexpectedly, 17 Education 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 17 Education will offset losses from the drop in 17 Education's long position.| Ellington Financial vs. National Beverage Corp | Ellington Financial vs. RCS MediaGroup SpA | Ellington Financial vs. The Coca Cola | Ellington Financial vs. PepsiCo |
| 17 Education vs. Sunlands Technology Group | 17 Education vs. Ihuman Inc | 17 Education vs. Gaotu Techedu DRC | 17 Education vs. New Oriental Education |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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