Correlation Between Elton International and General Commercial
Can any of the company-specific risk be diversified away by investing in both Elton International and General Commercial 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 Elton International and General Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elton International Trading and General Commercial Industrial, you can compare the effects of market volatilities on Elton International and General Commercial 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 Elton International with a short position of General Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elton International and General Commercial.
Diversification Opportunities for Elton International and General Commercial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elton and General is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Elton International Trading and General Commercial Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Commercial and Elton International 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 Elton International Trading are associated (or correlated) with General Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Commercial has no effect on the direction of Elton International i.e., Elton International and General Commercial go up and down completely randomly.
Pair Corralation between Elton International and General Commercial
Assuming the 90 days trading horizon Elton International Trading is expected to under-perform the General Commercial. In addition to that, Elton International is 1.06 times more volatile than General Commercial Industrial. It trades about -0.14 of its total potential returns per unit of risk. General Commercial Industrial is currently generating about 0.17 per unit of volatility. If you would invest 140.00 in General Commercial Industrial on November 5, 2024 and sell it today you would earn a total of 6.00 from holding General Commercial Industrial or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elton International Trading vs. General Commercial Industrial
Performance |
| Timeline |
| Elton International |
| General Commercial |
Elton International and General Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elton International and General Commercial
The main advantage of trading using opposite Elton International and General Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elton International position performs unexpectedly, General Commercial 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 General Commercial will offset losses from the drop in General Commercial's long position.| Elton International vs. Autohellas SA | Elton International vs. Admie Holding SA | Elton International vs. Hellenic Petroleum SA | Elton International vs. Jumbo SA |
| General Commercial vs. Ekter SA | General Commercial vs. Elton International Trading | General Commercial vs. Piraeus Port Authority | General Commercial vs. Hellenic Petroleum SA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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