Correlation Between Gabriel India and Elin Electronics

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Can any of the company-specific risk be diversified away by investing in both Gabriel India and Elin Electronics 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 Gabriel India and Elin Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabriel India Limited and Elin Electronics Limited, you can compare the effects of market volatilities on Gabriel India and Elin Electronics 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 Gabriel India with a short position of Elin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabriel India and Elin Electronics.

Diversification Opportunities for Gabriel India and Elin Electronics

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Gabriel and Elin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gabriel India Limited and Elin Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elin Electronics and Gabriel India 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 Gabriel India Limited are associated (or correlated) with Elin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elin Electronics has no effect on the direction of Gabriel India i.e., Gabriel India and Elin Electronics go up and down completely randomly.

Pair Corralation between Gabriel India and Elin Electronics

Assuming the 90 days trading horizon Gabriel India Limited is expected to generate 0.75 times more return on investment than Elin Electronics. However, Gabriel India Limited is 1.33 times less risky than Elin Electronics. It trades about 0.05 of its potential returns per unit of risk. Elin Electronics Limited is currently generating about -0.43 per unit of risk. If you would invest  45,280  in Gabriel India Limited on December 1, 2024 and sell it today you would earn a total of  1,110  from holding Gabriel India Limited or generate 2.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Gabriel India Limited  vs.  Elin Electronics Limited

 Performance 
       Timeline  
Gabriel India Limited 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Gabriel India Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Gabriel India is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Elin Electronics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Elin Electronics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Gabriel India and Elin Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gabriel India and Elin Electronics

The main advantage of trading using opposite Gabriel India and Elin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabriel India position performs unexpectedly, Elin Electronics 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 Elin Electronics will offset losses from the drop in Elin Electronics' long position.
The idea behind Gabriel India Limited and Elin Electronics Limited 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.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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