Correlation Between E L and OrganiGram Holdings
Can any of the company-specific risk be diversified away by investing in both E L and OrganiGram Holdings 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 OrganiGram Holdings 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 OrganiGram Holdings, you can compare the effects of market volatilities on E L and OrganiGram Holdings 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 OrganiGram Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and OrganiGram Holdings.
Diversification Opportunities for E L and OrganiGram Holdings
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELF and OrganiGram is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and OrganiGram Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OrganiGram Holdings 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 OrganiGram Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OrganiGram Holdings has no effect on the direction of E L i.e., E L and OrganiGram Holdings go up and down completely randomly.
Pair Corralation between E L and OrganiGram Holdings
Assuming the 90 days trading horizon E L is expected to generate 1.2 times less return on investment than OrganiGram Holdings. But when comparing it to its historical volatility, E L Financial Corp is 3.83 times less risky than OrganiGram Holdings. It trades about 0.13 of its potential returns per unit of risk. OrganiGram Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 175.00 in OrganiGram Holdings on September 12, 2024 and sell it today you would earn a total of 42.00 from holding OrganiGram Holdings or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. OrganiGram Holdings
Performance |
| Timeline |
| E L Financial |
| OrganiGram Holdings |
E L and OrganiGram Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and OrganiGram Holdings
The main advantage of trading using opposite E L and OrganiGram Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, OrganiGram Holdings 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 OrganiGram Holdings will offset losses from the drop in OrganiGram Holdings' long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| OrganiGram Holdings vs. Premium Income | OrganiGram Holdings vs. E L Financial Corp | OrganiGram Holdings vs. Fairfax Financial Holdings | OrganiGram Holdings vs. Fairfax Fin Hld |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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