Correlation Between Westshore Terminals and E L
Can any of the company-specific risk be diversified away by investing in both Westshore Terminals and E L 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 Westshore Terminals and E L into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westshore Terminals Investment and E L Financial Corp, you can compare the effects of market volatilities on Westshore Terminals and E L 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 Westshore Terminals with a short position of E L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westshore Terminals and E L.
Diversification Opportunities for Westshore Terminals and E L
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westshore and ELF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Westshore Terminals Investment and E L Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E L Financial and Westshore Terminals 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 Westshore Terminals Investment are associated (or correlated) with E L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E L Financial has no effect on the direction of Westshore Terminals i.e., Westshore Terminals and E L go up and down completely randomly.
Pair Corralation between Westshore Terminals and E L
Assuming the 90 days trading horizon Westshore Terminals is expected to generate 5.71 times less return on investment than E L. In addition to that, Westshore Terminals is 1.03 times more volatile than E L Financial Corp. It trades about 0.02 of its total potential returns per unit of risk. E L Financial Corp is currently generating about 0.09 per unit of volatility. If you would invest 82,950 in E L Financial Corp on November 1, 2024 and sell it today you would earn a total of 59,027 from holding E L Financial Corp or generate 71.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westshore Terminals Investment vs. E L Financial Corp
Performance |
| Timeline |
| Westshore Terminals |
| E L Financial |
Westshore Terminals and E L Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westshore Terminals and E L
The main advantage of trading using opposite Westshore Terminals and E L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westshore Terminals position performs unexpectedly, E L 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 E L will offset losses from the drop in E L's long position.| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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