Correlation Between E L and Global Crossing
Can any of the company-specific risk be diversified away by investing in both E L and Global Crossing 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 Global Crossing 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 Global Crossing Airlines, you can compare the effects of market volatilities on E L and Global Crossing 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 Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Global Crossing.
Diversification Opportunities for E L and Global Crossing
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ELF and Global is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines 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 Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of E L i.e., E L and Global Crossing go up and down completely randomly.
Pair Corralation between E L and Global Crossing
Assuming the 90 days trading horizon E L Financial Corp is expected to under-perform the Global Crossing. But the stock apears to be less risky and, when comparing its historical volatility, E L Financial Corp is 3.05 times less risky than Global Crossing. The stock trades about 0.0 of its potential returns per unit of risk. The Global Crossing Airlines is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 90.00 in Global Crossing Airlines on November 28, 2024 and sell it today you would earn a total of 12.00 from holding Global Crossing Airlines or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. Global Crossing Airlines
Performance |
| Timeline |
| E L Financial |
| Global Crossing Airlines |
E L and Global Crossing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Global Crossing
The main advantage of trading using opposite E L and Global Crossing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Global Crossing 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 Global Crossing will offset losses from the drop in Global Crossing's long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| Global Crossing vs. Major Drilling Group | Global Crossing vs. Sun Peak Metals | Global Crossing vs. Canadian General Investments | Global Crossing vs. XXIX Metal Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |