Correlation Between E L and Solid Impact
Can any of the company-specific risk be diversified away by investing in both E L and Solid 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 Solid 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 Solid Impact Investments, you can compare the effects of market volatilities on E L and Solid 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 Solid Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Solid Impact.
Diversification Opportunities for E L and Solid Impact
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELF-PH and Solid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial 3 and Solid Impact Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Impact Investments 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 Solid Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Impact Investments has no effect on the direction of E L i.e., E L and Solid Impact go up and down completely randomly.
Pair Corralation between E L and Solid Impact
Assuming the 90 days trading horizon E L Financial 3 is expected to generate 0.24 times more return on investment than Solid Impact. However, E L Financial 3 is 4.19 times less risky than Solid Impact. It trades about 0.06 of its potential returns per unit of risk. Solid Impact Investments is currently generating about -0.06 per unit of risk. If you would invest 1,872 in E L Financial 3 on September 13, 2024 and sell it today you would earn a total of 405.00 from holding E L Financial 3 or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial 3 vs. Solid Impact Investments
Performance |
| Timeline |
| E L Financial |
| Solid Impact Investments |
E L and Solid Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Solid Impact
The main advantage of trading using opposite E L and Solid Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Solid 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 Solid Impact will offset losses from the drop in Solid 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 |
| Solid Impact vs. Berkshire Hathaway CDR | Solid Impact vs. E L Financial Corp | Solid Impact vs. E L Financial 3 | Solid Impact 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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