Correlation Between E L and Hampton Financial
Can any of the company-specific risk be diversified away by investing in both E L and Hampton 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 Hampton 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 Corp and Hampton Financial Corp, you can compare the effects of market volatilities on E L and Hampton 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 Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Hampton Financial.
Diversification Opportunities for E L and Hampton Financial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ELF and Hampton is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial Corp 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 Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of E L i.e., E L and Hampton Financial go up and down completely randomly.
Pair Corralation between E L and Hampton Financial
Assuming the 90 days trading horizon E L Financial Corp is expected to generate 2.83 times more return on investment than Hampton Financial. However, E L is 2.83 times more volatile than Hampton Financial Corp. It trades about 0.1 of its potential returns per unit of risk. Hampton Financial Corp is currently generating about -0.33 per unit of risk. If you would invest 134,619 in E L Financial Corp on October 20, 2024 and sell it today you would earn a total of 4,881 from holding E L Financial Corp or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
E L Financial Corp vs. Hampton Financial Corp
Performance |
| Timeline |
| E L Financial |
| Hampton Financial Corp |
E L and Hampton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Hampton Financial
The main advantage of trading using opposite E L and Hampton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Hampton 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 Hampton Financial will offset losses from the drop in Hampton Financial's long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| Hampton Financial vs. Olympia Financial Group | Hampton Financial vs. Datable Technology Corp | Hampton Financial vs. Maple Peak Investments | Hampton Financial vs. Bank of Nova |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Transaction History View history of all your transactions and understand their impact on performance |