Correlation Between Alumil Aluminium and EL D

Can any of the company-specific risk be diversified away by investing in both Alumil Aluminium and EL D 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 Alumil Aluminium and EL D into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alumil Aluminium Industry and EL D Mouzakis, you can compare the effects of market volatilities on Alumil Aluminium and EL D 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 Alumil Aluminium with a short position of EL D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumil Aluminium and EL D.

Diversification Opportunities for Alumil Aluminium and EL D

-0.67

Correlation Coefficient

Alumil Aluminium  EL D

Excellent diversification

The 3 months correlation between Alumil and MOYZK is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alumil Aluminium Industry and EL D Mouzakis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EL D Mouzakis and Alumil Aluminium 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 Alumil Aluminium Industry are associated (or correlated) with EL D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EL D Mouzakis has no effect on the direction of Alumil Aluminium i.e., Alumil Aluminium and EL D go up and down completely randomly.

Pair Corralation between Alumil Aluminium and EL D

Assuming the 90 days trading horizon Alumil Aluminium Industry is expected to generate 0.87 times more return on investment than EL D. However, Alumil Aluminium Industry is 1.15 times less risky than EL D. It trades about 0.1 of its potential returns per unit of risk. EL D Mouzakis is currently generating about -0.05 per unit of risk. If you would invest  453.00  in Alumil Aluminium Industry on December 30, 2024 and sell it today you would earn a total of  56.00  from holding Alumil Aluminium Industry or generate 12.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Alumil Aluminium Industry  vs.  EL D Mouzakis

Alumil Aluminium Industry

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alumil Aluminium Industry are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alumil Aluminium unveiled solid returns over the last few months and may actually be approaching a breakup point.

EL D Mouzakis

Risk-Adjusted Performance

Very Weak

Over the last 90 days EL D Mouzakis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Alumil Aluminium and EL D

The main advantage of trading using opposite Alumil Aluminium and EL D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumil Aluminium position performs unexpectedly, EL D 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 EL D will offset losses from the drop in EL D's long position.

The idea behind Alumil Aluminium Industry and EL D Mouzakis 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.