Correlation Between Ellomay Capital and Southern Company
Can any of the company-specific risk be diversified away by investing in both Ellomay Capital and Southern Company 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 Ellomay Capital and Southern Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellomay Capital and Southern Company Series, you can compare the effects of market volatilities on Ellomay Capital and Southern Company 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 Ellomay Capital with a short position of Southern Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellomay Capital and Southern Company.
Diversification Opportunities for Ellomay Capital and Southern Company
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ellomay and Southern is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ellomay Capital and Southern Company Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Company and Ellomay Capital 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 Ellomay Capital are associated (or correlated) with Southern Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Company has no effect on the direction of Ellomay Capital i.e., Ellomay Capital and Southern Company go up and down completely randomly.
Pair Corralation between Ellomay Capital and Southern Company
Given the investment horizon of 90 days Ellomay Capital is expected to generate 2.93 times more return on investment than Southern Company. However, Ellomay Capital is 2.93 times more volatile than Southern Company Series. It trades about 0.23 of its potential returns per unit of risk. Southern Company Series is currently generating about -0.23 per unit of risk. If you would invest 1,387 in Ellomay Capital on August 31, 2024 and sell it today you would earn a total of 213.00 from holding Ellomay Capital or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellomay Capital vs. Southern Company Series
Performance |
| Timeline |
| Ellomay Capital |
| Southern Company |
Ellomay Capital and Southern Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellomay Capital and Southern Company
The main advantage of trading using opposite Ellomay Capital and Southern Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellomay Capital position performs unexpectedly, Southern Company 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 Southern Company will offset losses from the drop in Southern Company's long position.| Ellomay Capital vs. Verde Clean Fuels | Ellomay Capital vs. Eco Wave Power | Ellomay Capital vs. Fluence Energy | Ellomay Capital vs. Advent Technologies Holdings |
| Southern Company vs. Southern Co | Southern Company vs. DTE Energy | Southern Company vs. Southern Co | Southern Company vs. Prudential Financial 4125 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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