Correlation Between Network 1 and Elis SA
Can any of the company-specific risk be diversified away by investing in both Network 1 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 Network 1 and Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network 1 Technologies and Elis SA, you can compare the effects of market volatilities on Network 1 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 Network 1 with a short position of Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network 1 and Elis SA.
Diversification Opportunities for Network 1 and Elis SA
Very good diversification
The 3 months correlation between Network and Elis is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Network 1 Technologies and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA and Network 1 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 Network 1 Technologies 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 Network 1 i.e., Network 1 and Elis SA go up and down completely randomly.
Pair Corralation between Network 1 and Elis SA
Given the investment horizon of 90 days Network 1 Technologies is expected to under-perform the Elis SA. But the stock apears to be less risky and, when comparing its historical volatility, Network 1 Technologies is 1.73 times less risky than Elis SA. The stock trades about -0.04 of its potential returns per unit of risk. The Elis SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,550 in Elis SA on September 12, 2024 and sell it today you would earn a total of 430.00 from holding Elis SA or generate 27.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.04% |
| Values | Daily Returns |
Network 1 Technologies vs. Elis SA
Performance |
| Timeline |
| Network 1 Technologies |
| Elis SA |
Network 1 and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Network 1 and Elis SA
The main advantage of trading using opposite Network 1 and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network 1 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.| Network 1 vs. Civeo Corp | Network 1 vs. BrightView Holdings | Network 1 vs. Maximus | Network 1 vs. CBIZ Inc |
| Elis SA vs. Maximus | Elis SA vs. Network 1 Technologies | Elis SA vs. First Advantage Corp | Elis SA vs. BrightView Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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