Correlation Between Winpak and Element Fleet
Can any of the company-specific risk be diversified away by investing in both Winpak and Element Fleet 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 Winpak and Element Fleet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winpak and Element Fleet Management, you can compare the effects of market volatilities on Winpak and Element Fleet 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 Winpak with a short position of Element Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winpak and Element Fleet.
Diversification Opportunities for Winpak and Element Fleet
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Winpak and Element is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Winpak and Element Fleet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Fleet Management and Winpak 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 Winpak are associated (or correlated) with Element Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Fleet Management has no effect on the direction of Winpak i.e., Winpak and Element Fleet go up and down completely randomly.
Pair Corralation between Winpak and Element Fleet
Assuming the 90 days trading horizon Winpak is expected to generate 1.99 times less return on investment than Element Fleet. In addition to that, Winpak is 1.06 times more volatile than Element Fleet Management. It trades about 0.05 of its total potential returns per unit of risk. Element Fleet Management is currently generating about 0.1 per unit of volatility. If you would invest 1,971 in Element Fleet Management on August 28, 2024 and sell it today you would earn a total of 1,049 from holding Element Fleet Management or generate 53.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winpak vs. Element Fleet Management
Performance |
| Timeline |
| Winpak |
| Element Fleet Management |
Winpak and Element Fleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winpak and Element Fleet
The main advantage of trading using opposite Winpak and Element Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winpak position performs unexpectedly, Element Fleet 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 Fleet will offset losses from the drop in Element Fleet's long position.| Winpak vs. Globex Mining Enterprises | Winpak vs. Guru Organic Energy | Winpak vs. Aya Gold Silver | Winpak vs. Metalero Mining Corp |
| Element Fleet vs. ECN Capital Corp | Element Fleet vs. Martinrea International | Element Fleet vs. CCL Industries | Element Fleet vs. FirstService Corp |
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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