Correlation Between GUDANG GARAM and Elis SA
Can any of the company-specific risk be diversified away by investing in both GUDANG GARAM and Elis SA 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 GUDANG GARAM and Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUDANG GARAM and Elis SA, you can compare the effects of market volatilities on GUDANG GARAM and Elis SA 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 GUDANG GARAM with a short position of Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUDANG GARAM and Elis SA.
Diversification Opportunities for GUDANG GARAM and Elis SA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GUDANG and Elis is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GUDANG GARAM and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA and GUDANG GARAM 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 GUDANG GARAM are associated (or correlated) with Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of GUDANG GARAM i.e., GUDANG GARAM and Elis SA go up and down completely randomly.
Pair Corralation between GUDANG GARAM and Elis SA
Assuming the 90 days trading horizon GUDANG GARAM is expected to under-perform the Elis SA. But the stock apears to be less risky and, when comparing its historical volatility, GUDANG GARAM is 1.13 times less risky than Elis SA. The stock trades about -0.11 of its potential returns per unit of risk. The Elis SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,332 in Elis SA on September 1, 2024 and sell it today you would lose (411.00) from holding Elis SA or give up 17.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUDANG GARAM vs. Elis SA
Performance |
| Timeline |
| GUDANG GARAM |
| Elis SA |
GUDANG GARAM and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUDANG GARAM and Elis SA
The main advantage of trading using opposite GUDANG GARAM and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUDANG GARAM position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.| GUDANG GARAM vs. SIVERS SEMICONDUCTORS AB | GUDANG GARAM vs. Darden Restaurants | GUDANG GARAM vs. Reliance Steel Aluminum | GUDANG GARAM vs. Q2M Managementberatung AG |
| Elis SA vs. INTERSHOP Communications Aktiengesellschaft | Elis SA vs. MI Homes | Elis SA vs. INVITATION HOMES DL | Elis SA vs. LGI Homes |
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.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets |