Correlation Between E For and ATP 30
Can any of the company-specific risk be diversified away by investing in both E For and ATP 30 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 E For and ATP 30 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E for L and ATP 30 Public, you can compare the effects of market volatilities on E For and ATP 30 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 E For with a short position of ATP 30. Check out your portfolio center. Please also check ongoing floating volatility patterns of E For and ATP 30.
Diversification Opportunities for E For and ATP 30
Very weak diversification
The 3 months correlation between EFORL and ATP is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding E for L and ATP 30 Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATP 30 Public and E For 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 E for L are associated (or correlated) with ATP 30. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATP 30 Public has no effect on the direction of E For i.e., E For and ATP 30 go up and down completely randomly.
Pair Corralation between E For and ATP 30
Assuming the 90 days trading horizon E for L is expected to generate 2.63 times more return on investment than ATP 30. However, E For is 2.63 times more volatile than ATP 30 Public. It trades about 0.3 of its potential returns per unit of risk. ATP 30 Public is currently generating about 0.13 per unit of risk. If you would invest 20.00 in E for L on September 3, 2024 and sell it today you would earn a total of 7.00 from holding E for L or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E for L vs. ATP 30 Public
Performance |
| Timeline |
| E for L |
| ATP 30 Public |
E For and ATP 30 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E For and ATP 30
The main advantage of trading using opposite E For and ATP 30 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E For position performs unexpectedly, ATP 30 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 ATP 30 will offset losses from the drop in ATP 30's long position.| E For vs. East Coast Furnitech | E For vs. Forth Smart Service | E For vs. Filter Vision Public | E For vs. ARIP Public |
| ATP 30 vs. Dynasty Ceramic Public | ATP 30 vs. Filter Vision Public | ATP 30 vs. East Coast Furnitech | ATP 30 vs. Asia Green Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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