Correlation Between E L and Olympia Financial
Can any of the company-specific risk be diversified away by investing in both E L and Olympia 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 Olympia 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 Olympia Financial Group, you can compare the effects of market volatilities on E L and Olympia 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 Olympia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Olympia Financial.
Diversification Opportunities for E L and Olympia Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELF and Olympia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Olympia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympia Financial 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 Olympia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympia Financial has no effect on the direction of E L i.e., E L and Olympia Financial go up and down completely randomly.
Pair Corralation between E L and Olympia Financial
Assuming the 90 days trading horizon E L Financial Corp is expected to generate 3.56 times more return on investment than Olympia Financial. However, E L is 3.56 times more volatile than Olympia Financial Group. It trades about 0.21 of its potential returns per unit of risk. Olympia Financial Group is currently generating about 0.0 per unit of risk. If you would invest 133,719 in E L Financial Corp on October 25, 2024 and sell it today you would earn a total of 17,281 from holding E L Financial Corp or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. Olympia Financial Group
Performance |
| Timeline |
| E L Financial |
| Olympia Financial |
E L and Olympia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Olympia Financial
The main advantage of trading using opposite E L and Olympia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Olympia 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 Olympia Financial will offset losses from the drop in Olympia 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 |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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