Correlation Between Elton International and Marfin Investment
Can any of the company-specific risk be diversified away by investing in both Elton International and Marfin Investment 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 Marfin Investment 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 Marfin Investment Group, you can compare the effects of market volatilities on Elton International and Marfin Investment 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 Marfin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elton International and Marfin Investment.
Diversification Opportunities for Elton International and Marfin Investment
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elton and Marfin is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elton International Trading and Marfin Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfin Investment 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 Marfin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfin Investment has no effect on the direction of Elton International i.e., Elton International and Marfin Investment go up and down completely randomly.
Pair Corralation between Elton International and Marfin Investment
Assuming the 90 days trading horizon Elton International Trading is expected to generate 0.71 times more return on investment than Marfin Investment. However, Elton International Trading is 1.41 times less risky than Marfin Investment. It trades about 0.21 of its potential returns per unit of risk. Marfin Investment Group is currently generating about -0.04 per unit of risk. If you would invest 173.00 in Elton International Trading on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Elton International Trading or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elton International Trading vs. Marfin Investment Group
Performance |
| Timeline |
| Elton International |
| Marfin Investment |
Elton International and Marfin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elton International and Marfin Investment
The main advantage of trading using opposite Elton International and Marfin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elton International position performs unexpectedly, Marfin Investment 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 Marfin Investment will offset losses from the drop in Marfin Investment'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 |
| Marfin Investment vs. Eurobank Ergasias Services | Marfin Investment vs. Performance Technologies SA | Marfin Investment vs. CPI Computer Peripherals | Marfin Investment vs. Bank of Greece |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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