Correlation Between E L and Dayforce
Can any of the company-specific risk be diversified away by investing in both E L and Dayforce 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 Dayforce 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 Dayforce, you can compare the effects of market volatilities on E L and Dayforce 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 Dayforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Dayforce.
Diversification Opportunities for E L and Dayforce
Weak diversification
The 3 months correlation between ELF and Dayforce is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Dayforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayforce 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 Dayforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayforce has no effect on the direction of E L i.e., E L and Dayforce go up and down completely randomly.
Pair Corralation between E L and Dayforce
Assuming the 90 days trading horizon E L Financial Corp is expected to generate 2.03 times more return on investment than Dayforce. However, E L is 2.03 times more volatile than Dayforce. It trades about 0.09 of its potential returns per unit of risk. Dayforce is currently generating about 0.01 per unit of risk. If you would invest 132,500 in E L Financial Corp on November 3, 2024 and sell it today you would earn a total of 7,575 from holding E L Financial Corp or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. Dayforce
Performance |
| Timeline |
| E L Financial |
| Dayforce |
E L and Dayforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Dayforce
The main advantage of trading using opposite E L and Dayforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Dayforce 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 Dayforce will offset losses from the drop in Dayforce's long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| Dayforce vs. CNJ Capital Investments | Dayforce vs. First National Financial | Dayforce vs. Olympia Financial Group | Dayforce vs. iA Financial |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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