Correlation Between Elton International and Quest Holdings
Can any of the company-specific risk be diversified away by investing in both Elton International and Quest Holdings 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 Quest Holdings 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 Quest Holdings SA, you can compare the effects of market volatilities on Elton International and Quest Holdings 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 Quest Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elton International and Quest Holdings.
Diversification Opportunities for Elton International and Quest Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elton and Quest is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Elton International Trading and Quest Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quest Holdings 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 Quest Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quest Holdings SA has no effect on the direction of Elton International i.e., Elton International and Quest Holdings go up and down completely randomly.
Pair Corralation between Elton International and Quest Holdings
Assuming the 90 days trading horizon Elton International Trading is expected to generate 1.26 times more return on investment than Quest Holdings. However, Elton International is 1.26 times more volatile than Quest Holdings SA. It trades about 0.2 of its potential returns per unit of risk. Quest Holdings SA is currently generating about -0.07 per unit of risk. If you would invest 172.00 in Elton International Trading on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Elton International Trading or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elton International Trading vs. Quest Holdings SA
Performance |
| Timeline |
| Elton International |
| Quest Holdings SA |
Elton International and Quest Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elton International and Quest Holdings
The main advantage of trading using opposite Elton International and Quest Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elton International position performs unexpectedly, Quest Holdings 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 Quest Holdings will offset losses from the drop in Quest Holdings' long position.| Elton International vs. Autohellas SA | Elton International vs. Admie Holding SA | Elton International vs. Hellenic Petroleum SA | Elton International vs. Jumbo SA |
| Quest Holdings vs. Performance Technologies SA | Quest Holdings vs. National Bank of | Quest Holdings vs. EL D Mouzakis | Quest Holdings vs. Lampsa Hellenic Hotels |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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