Correlation Between Elton International and Mevaco SA
Can any of the company-specific risk be diversified away by investing in both Elton International and Mevaco SA 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 Mevaco SA 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 Mevaco SA, you can compare the effects of market volatilities on Elton International and Mevaco SA 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 Mevaco SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elton International and Mevaco SA.
Diversification Opportunities for Elton International and Mevaco SA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elton and Mevaco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elton International Trading and Mevaco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mevaco SA 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 Mevaco SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mevaco SA has no effect on the direction of Elton International i.e., Elton International and Mevaco SA go up and down completely randomly.
Pair Corralation between Elton International and Mevaco SA
Assuming the 90 days trading horizon Elton International Trading is expected to under-perform the Mevaco SA. In addition to that, Elton International is 1.0 times more volatile than Mevaco SA. It trades about -0.03 of its total potential returns per unit of risk. Mevaco SA is currently generating about -0.01 per unit of volatility. If you would invest 392.00 in Mevaco SA on September 3, 2024 and sell it today you would lose (36.00) from holding Mevaco SA or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elton International Trading vs. Mevaco SA
Performance |
| Timeline |
| Elton International |
| Mevaco SA |
Elton International and Mevaco SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elton International and Mevaco SA
The main advantage of trading using opposite Elton International and Mevaco SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elton International position performs unexpectedly, Mevaco SA 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 Mevaco SA will offset losses from the drop in Mevaco SA'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 |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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