Correlation Between 17 Education and Ellington Financial
Can any of the company-specific risk be diversified away by investing in both 17 Education and Ellington Financial 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 17 Education and Ellington Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 17 Education Technology and Ellington Financial, you can compare the effects of market volatilities on 17 Education and Ellington Financial 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 17 Education with a short position of Ellington Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 17 Education and Ellington Financial.
Diversification Opportunities for 17 Education and Ellington Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between 17 Education and Ellington is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding 17 Education Technology and Ellington Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellington Financial and 17 Education 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 17 Education Technology are associated (or correlated) with Ellington Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellington Financial has no effect on the direction of 17 Education i.e., 17 Education and Ellington Financial go up and down completely randomly.
Pair Corralation between 17 Education and Ellington Financial
Allowing for the 90-day total investment horizon 17 Education Technology is expected to under-perform the Ellington Financial. In addition to that, 17 Education is 26.02 times more volatile than Ellington Financial. It trades about -0.2 of its total potential returns per unit of risk. Ellington Financial is currently generating about 0.32 per unit of volatility. If you would invest 2,542 in Ellington Financial on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Ellington Financial or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
17 Education Technology vs. Ellington Financial
Performance |
| Timeline |
| 17 Education Technology |
| Ellington Financial |
17 Education and Ellington Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 17 Education and Ellington Financial
The main advantage of trading using opposite 17 Education and Ellington Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 17 Education position performs unexpectedly, Ellington Financial 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 Ellington Financial will offset losses from the drop in Ellington Financial's long position.| 17 Education vs. Sunlands Technology Group | 17 Education vs. Ihuman Inc | 17 Education vs. Gaotu Techedu DRC | 17 Education vs. New Oriental Education |
| Ellington Financial vs. 17 Education Technology | Ellington Financial vs. Universal Technical Institute | Ellington Financial vs. Acco Brands | Ellington Financial vs. American Axle Manufacturing |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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