Correlation Between First International and Electreon Wireless
Can any of the company-specific risk be diversified away by investing in both First International and Electreon Wireless 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 First International and Electreon Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First International Bank and Electreon Wireless, you can compare the effects of market volatilities on First International and Electreon Wireless 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 First International with a short position of Electreon Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of First International and Electreon Wireless.
Diversification Opportunities for First International and Electreon Wireless
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Electreon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding First International Bank and Electreon Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electreon Wireless and First 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 First International Bank are associated (or correlated) with Electreon Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electreon Wireless has no effect on the direction of First International i.e., First International and Electreon Wireless go up and down completely randomly.
Pair Corralation between First International and Electreon Wireless
Assuming the 90 days trading horizon First International Bank is expected to generate 0.27 times more return on investment than Electreon Wireless. However, First International Bank is 3.71 times less risky than Electreon Wireless. It trades about 0.31 of its potential returns per unit of risk. Electreon Wireless is currently generating about 0.01 per unit of risk. If you would invest 1,541,000 in First International Bank on August 30, 2024 and sell it today you would earn a total of 200,000 from holding First International Bank or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First International Bank vs. Electreon Wireless
Performance |
| Timeline |
| First International Bank |
| Electreon Wireless |
First International and Electreon Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First International and Electreon Wireless
The main advantage of trading using opposite First International and Electreon Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First International position performs unexpectedly, Electreon Wireless 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 Electreon Wireless will offset losses from the drop in Electreon Wireless' long position.| First International vs. Elbit Systems | First International vs. Discount Investment Corp | First International vs. AudioCodes | First International vs. Shufersal |
| Electreon Wireless vs. Augwind Energy Tech | Electreon Wireless vs. Fattal 1998 Holdings | Electreon Wireless vs. B Communications | Electreon Wireless vs. Nova |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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