Correlation Between E L and BOEING CDR
Can any of the company-specific risk be diversified away by investing in both E L and BOEING CDR 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 BOEING CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E L Financial Corp and BOEING CDR, you can compare the effects of market volatilities on E L and BOEING CDR 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 BOEING CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and BOEING CDR.
Diversification Opportunities for E L and BOEING CDR
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELF and BOEING is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and BOEING CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CDR 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 Corp are associated (or correlated) with BOEING CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CDR has no effect on the direction of E L i.e., E L and BOEING CDR go up and down completely randomly.
Pair Corralation between E L and BOEING CDR
Assuming the 90 days trading horizon E L Financial Corp is expected to generate 1.01 times more return on investment than BOEING CDR. However, E L is 1.01 times more volatile than BOEING CDR. It trades about 0.26 of its potential returns per unit of risk. BOEING CDR is currently generating about 0.03 per unit of risk. If you would invest 131,500 in E L Financial Corp on September 2, 2024 and sell it today you would earn a total of 16,000 from holding E L Financial Corp or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. BOEING CDR
Performance |
| Timeline |
| E L Financial |
| BOEING CDR |
E L and BOEING CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and BOEING CDR
The main advantage of trading using opposite E L and BOEING CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, BOEING CDR 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 BOEING CDR will offset losses from the drop in BOEING CDR's long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| BOEING CDR vs. Canaf Investments | BOEING CDR vs. Economic Investment Trust | BOEING CDR vs. Western Investment | BOEING CDR vs. Algoma Steel Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |