Correlation Between E L and Olympia Financial
Can any of the company-specific risk be diversified away by investing in both E L and Olympia Financial 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 Olympia Financial 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 Olympia Financial Group, you can compare the effects of market volatilities on E L and Olympia Financial 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 Olympia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Olympia Financial.
Diversification Opportunities for E L and Olympia Financial
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELF-PH and Olympia is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial 3 and Olympia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympia Financial 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 Olympia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympia Financial has no effect on the direction of E L i.e., E L and Olympia Financial go up and down completely randomly.
Pair Corralation between E L and Olympia Financial
Assuming the 90 days trading horizon E L Financial 3 is expected to generate 0.69 times more return on investment than Olympia Financial. However, E L Financial 3 is 1.46 times less risky than Olympia Financial. It trades about 0.18 of its potential returns per unit of risk. Olympia Financial Group is currently generating about -0.04 per unit of risk. If you would invest 2,225 in E L Financial 3 on September 13, 2024 and sell it today you would earn a total of 52.00 from holding E L Financial 3 or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial 3 vs. Olympia Financial Group
Performance |
| Timeline |
| E L Financial |
| Olympia Financial |
E L and Olympia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Olympia Financial
The main advantage of trading using opposite E L and Olympia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Olympia Financial 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 Olympia Financial will offset losses from the drop in Olympia Financial'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 |
| Olympia Financial vs. Berkshire Hathaway CDR | Olympia Financial vs. E L Financial Corp | Olympia Financial vs. E L Financial 3 | Olympia Financial vs. Molson Coors Canada |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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