Correlation Between EJF Investments and International Biotechnology
Can any of the company-specific risk be diversified away by investing in both EJF Investments and International Biotechnology 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 International Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and International Biotechnology Trust, you can compare the effects of market volatilities on EJF Investments and International Biotechnology 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 International Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and International Biotechnology.
Diversification Opportunities for EJF Investments and International Biotechnology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EJF and International is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and International Biotechnology Tr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Biotechnology 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 International Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Biotechnology has no effect on the direction of EJF Investments i.e., EJF Investments and International Biotechnology go up and down completely randomly.
Pair Corralation between EJF Investments and International Biotechnology
Assuming the 90 days trading horizon EJF Investments is expected to generate 12.48 times less return on investment than International Biotechnology. In addition to that, EJF Investments is 1.16 times more volatile than International Biotechnology Trust. It trades about 0.0 of its total potential returns per unit of risk. International Biotechnology Trust is currently generating about 0.02 per unit of volatility. If you would invest 63,669 in International Biotechnology Trust on October 11, 2024 and sell it today you would earn a total of 6,131 from holding International Biotechnology Trust or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EJF Investments vs. International Biotechnology Tr
Performance |
| Timeline |
| EJF Investments |
| International Biotechnology |
EJF Investments and International Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and International Biotechnology
The main advantage of trading using opposite EJF Investments and International Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, International Biotechnology 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 International Biotechnology will offset losses from the drop in International Biotechnology's long position.| EJF Investments vs. Science in Sport | EJF Investments vs. JD Sports Fashion | EJF Investments vs. Symphony Environmental Technologies | EJF Investments vs. Baker Steel Resources |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |