Correlation Between E For and NCL International
Can any of the company-specific risk be diversified away by investing in both E For and NCL International 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 NCL International 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 NCL International Logistics, you can compare the effects of market volatilities on E For and NCL International 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 NCL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of E For and NCL International.
Diversification Opportunities for E For and NCL International
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between EFORL and NCL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding E for L and NCL International Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCL International 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 NCL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCL International has no effect on the direction of E For i.e., E For and NCL International go up and down completely randomly.
Pair Corralation between E For and NCL International
Assuming the 90 days trading horizon E for L is expected to generate 1.77 times more return on investment than NCL International. However, E For is 1.77 times more volatile than NCL International Logistics. It trades about 0.41 of its potential returns per unit of risk. NCL International Logistics is currently generating about 0.1 per unit of risk. If you would invest 13.00 in E for L on August 31, 2024 and sell it today you would earn a total of 14.00 from holding E for L or generate 107.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
E for L vs. NCL International Logistics
Performance |
| Timeline |
| E for L |
| NCL International |
E For and NCL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E For and NCL International
The main advantage of trading using opposite E For and NCL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E For position performs unexpectedly, NCL International 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 NCL International will offset losses from the drop in NCL International's long position.| E For vs. Dohome Public | E For vs. Humanica Public | E For vs. Jay Mart Public | E For vs. Siam Global House |
| NCL International vs. Kingsmen CMTI Public | NCL International vs. International Research | NCL International vs. Masterkool International Public | NCL International vs. News Network |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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