Correlation Between E L and Rakovina Therapeutics
Can any of the company-specific risk be diversified away by investing in both E L and Rakovina Therapeutics 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 Rakovina Therapeutics 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 Rakovina Therapeutics, you can compare the effects of market volatilities on E L and Rakovina Therapeutics 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 Rakovina Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Rakovina Therapeutics.
Diversification Opportunities for E L and Rakovina Therapeutics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ELF and Rakovina is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Rakovina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rakovina Therapeutics 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 Rakovina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rakovina Therapeutics has no effect on the direction of E L i.e., E L and Rakovina Therapeutics go up and down completely randomly.
Pair Corralation between E L and Rakovina Therapeutics
Assuming the 90 days trading horizon E L is expected to generate 2.27 times less return on investment than Rakovina Therapeutics. But when comparing it to its historical volatility, E L Financial Corp is 6.81 times less risky than Rakovina Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Rakovina Therapeutics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Rakovina Therapeutics on September 12, 2024 and sell it today you would lose (2.00) from holding Rakovina Therapeutics or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. Rakovina Therapeutics
Performance |
| Timeline |
| E L Financial |
| Rakovina Therapeutics |
E L and Rakovina Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Rakovina Therapeutics
The main advantage of trading using opposite E L and Rakovina Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Rakovina Therapeutics 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 Rakovina Therapeutics will offset losses from the drop in Rakovina Therapeutics' long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| Rakovina Therapeutics vs. Premium Income | Rakovina Therapeutics vs. E L Financial Corp | Rakovina Therapeutics vs. Fairfax Financial Holdings | Rakovina Therapeutics 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |