Correlation Between Electrica and EJF Investments
Can any of the company-specific risk be diversified away by investing in both Electrica and EJF Investments 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 Electrica and EJF Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrica SA and EJF Investments, you can compare the effects of market volatilities on Electrica and EJF Investments 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 Electrica with a short position of EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrica and EJF Investments.
Diversification Opportunities for Electrica and EJF Investments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electrica and EJF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electrica SA and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments and Electrica 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 Electrica SA are associated (or correlated) with EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Electrica i.e., Electrica and EJF Investments go up and down completely randomly.
Pair Corralation between Electrica and EJF Investments
If you would invest 12,000 in EJF Investments on October 25, 2024 and sell it today you would earn a total of 750.00 from holding EJF Investments or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Electrica SA vs. EJF Investments
Performance |
| Timeline |
| Electrica SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EJF Investments |
Electrica and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrica and EJF Investments
The main advantage of trading using opposite Electrica and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrica position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| Electrica vs. Electronic Arts | Electrica vs. JD Sports Fashion | Electrica vs. Bankers Investment Trust | Electrica vs. Ally Financial |
| EJF Investments vs. Infrastrutture Wireless Italiane | EJF Investments vs. Mobius Investment Trust | EJF Investments vs. Ecclesiastical Insurance Office | EJF Investments vs. Universal Display 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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