Correlation Between EJF Investments and United States
Can any of the company-specific risk be diversified away by investing in both EJF Investments and United States 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 EJF Investments and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and United States Steel, you can compare the effects of market volatilities on EJF Investments and United States 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 EJF Investments with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and United States.
Diversification Opportunities for EJF Investments and United States
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EJF and United is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and EJF Investments 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 EJF Investments are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of EJF Investments i.e., EJF Investments and United States go up and down completely randomly.
Pair Corralation between EJF Investments and United States
Assuming the 90 days trading horizon EJF Investments is expected to generate 11.56 times less return on investment than United States. But when comparing it to its historical volatility, EJF Investments is 2.31 times less risky than United States. It trades about 0.01 of its potential returns per unit of risk. United States Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,807 in United States Steel on October 16, 2024 and sell it today you would earn a total of 854.00 from holding United States Steel or generate 30.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
EJF Investments vs. United States Steel
Performance |
| Timeline |
| EJF Investments |
| United States Steel |
EJF Investments and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and United States
The main advantage of trading using opposite EJF Investments and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| EJF Investments vs. Gamma Communications PLC | EJF Investments vs. Verizon Communications | EJF Investments vs. Spirent Communications plc | EJF Investments vs. Evolution Gaming Group |
| United States vs. JB Hunt Transport | United States vs. Guild Esports Plc | United States vs. Centaur Media | United States vs. LBG Media PLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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