Correlation Between EJF Investments and Schroders Investment
Can any of the company-specific risk be diversified away by investing in both EJF Investments and Schroders Investment 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 Schroders Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Schroders Investment Trusts, you can compare the effects of market volatilities on EJF Investments and Schroders Investment 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 Schroders Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Schroders Investment.
Diversification Opportunities for EJF Investments and Schroders Investment
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EJF and Schroders is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Schroders Investment Trusts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders Investment 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 Schroders Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders Investment has no effect on the direction of EJF Investments i.e., EJF Investments and Schroders Investment go up and down completely randomly.
Pair Corralation between EJF Investments and Schroders Investment
Assuming the 90 days trading horizon EJF Investments is expected to generate 1.47 times more return on investment than Schroders Investment. However, EJF Investments is 1.47 times more volatile than Schroders Investment Trusts. It trades about 0.35 of its potential returns per unit of risk. Schroders Investment Trusts is currently generating about 0.28 per unit of risk. If you would invest 12,000 in EJF Investments on October 25, 2024 and sell it today you would earn a total of 750.00 from holding EJF Investments or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EJF Investments vs. Schroders Investment Trusts
Performance |
| Timeline |
| EJF Investments |
| Schroders Investment |
EJF Investments and Schroders Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Schroders Investment
The main advantage of trading using opposite EJF Investments and Schroders Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, Schroders Investment 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 Schroders Investment will offset losses from the drop in Schroders Investment's long position.| EJF Investments vs. Infrastrutture Wireless Italiane | EJF Investments vs. Mobius Investment Trust | EJF Investments vs. Ecclesiastical Insurance Office | EJF Investments vs. Universal Display Corp |
| Schroders Investment vs. Bankers Investment Trust | Schroders Investment vs. Lindsell Train Investment | Schroders Investment vs. Spire Healthcare Group | Schroders Investment vs. Naturhouse Health SA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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