Correlation Between Pool and Element Global
Can any of the company-specific risk be diversified away by investing in both Pool and Element Global 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 Pool and Element Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pool Corporation and Element Global, you can compare the effects of market volatilities on Pool and Element Global 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 Pool with a short position of Element Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and Element Global.
Diversification Opportunities for Pool and Element Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pool and Element is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and Element Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Global and Pool 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 Pool Corporation are associated (or correlated) with Element Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Global has no effect on the direction of Pool i.e., Pool and Element Global go up and down completely randomly.
Pair Corralation between Pool and Element Global
If you would invest 35,520 in Pool Corporation on August 26, 2024 and sell it today you would earn a total of 1,129 from holding Pool Corporation or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pool Corp. vs. Element Global
Performance |
| Timeline |
| Pool |
| Element Global |
Pool and Element Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and Element Global
The main advantage of trading using opposite Pool and Element Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool position performs unexpectedly, Element Global 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 Element Global will offset losses from the drop in Element Global's long position.The idea behind Pool Corporation and Element Global 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.| Element Global vs. Pool Corporation | Element Global vs. Asbury Automotive Group | Element Global vs. Grocery Outlet Holding | Element Global vs. SunLink Health Systems |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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