Correlation Between Elastic NV and Ke Holdings
Can any of the company-specific risk be diversified away by investing in both Elastic NV and Ke 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 Elastic NV and Ke Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elastic NV and Ke Holdings, you can compare the effects of market volatilities on Elastic NV and Ke 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 Elastic NV with a short position of Ke Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elastic NV and Ke Holdings.
Diversification Opportunities for Elastic NV and Ke Holdings
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Elastic and BEKE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Elastic NV and Ke Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ke Holdings and Elastic NV 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 Elastic NV are associated (or correlated) with Ke Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ke Holdings has no effect on the direction of Elastic NV i.e., Elastic NV and Ke Holdings go up and down completely randomly.
Pair Corralation between Elastic NV and Ke Holdings
Given the investment horizon of 90 days Elastic NV is expected to generate 3.91 times less return on investment than Ke Holdings. But when comparing it to its historical volatility, Elastic NV is 1.12 times less risky than Ke Holdings. It trades about 0.01 of its potential returns per unit of risk. Ke Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,473 in Ke Holdings on September 3, 2024 and sell it today you would earn a total of 458.00 from holding Ke Holdings or generate 31.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elastic NV vs. Ke Holdings
Performance |
| Timeline |
| Elastic NV |
| Ke Holdings |
Elastic NV and Ke Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elastic NV and Ke Holdings
The main advantage of trading using opposite Elastic NV and Ke Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elastic NV position performs unexpectedly, Ke 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 Ke Holdings will offset losses from the drop in Ke Holdings' long position.The idea behind Elastic NV and Ke Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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