Correlation Between E L and Green Impact
Can any of the company-specific risk be diversified away by investing in both E L and Green Impact 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 L and Green Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E L Financial 3 and Green Impact Partners, you can compare the effects of market volatilities on E L and Green Impact 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 L with a short position of Green Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Green Impact.
Diversification Opportunities for E L and Green Impact
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ELF-PH and Green is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial 3 and Green Impact Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Impact Partners and E L 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 L Financial 3 are associated (or correlated) with Green Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Impact Partners has no effect on the direction of E L i.e., E L and Green Impact go up and down completely randomly.
Pair Corralation between E L and Green Impact
Assuming the 90 days trading horizon E L Financial 3 is expected to under-perform the Green Impact. But the preferred stock apears to be less risky and, when comparing its historical volatility, E L Financial 3 is 3.7 times less risky than Green Impact. The preferred stock trades about -0.2 of its potential returns per unit of risk. The Green Impact Partners is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 320.00 in Green Impact Partners on August 30, 2024 and sell it today you would earn a total of 80.00 from holding Green Impact Partners or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial 3 vs. Green Impact Partners
Performance |
| Timeline |
| E L Financial |
| Green Impact Partners |
E L and Green Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Green Impact
The main advantage of trading using opposite E L and Green Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Green Impact 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 Green Impact will offset losses from the drop in Green Impact's long position.| E L vs. Fairfax Financial Holdings | E L vs. Fairfax Financial Holdings | E L vs. Fairfax Financial Holdings | E L vs. Fairfax Financial Holdings |
| Green Impact vs. EverGen Infrastructure Corp | Green Impact vs. Tidewater Renewables | Green Impact vs. Anaergia |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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