Correlation Between Elysee Development and Cardiff Lexington

Can any of the company-specific risk be diversified away by investing in both Elysee Development and Cardiff Lexington 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 Elysee Development and Cardiff Lexington into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elysee Development Corp and Cardiff Lexington Corp, you can compare the effects of market volatilities on Elysee Development and Cardiff Lexington 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 Elysee Development with a short position of Cardiff Lexington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elysee Development and Cardiff Lexington.

Diversification Opportunities for Elysee Development and Cardiff Lexington

0.42

Correlation Coefficient

Elysee Development  Cardiff Lexington

Very weak diversification

The 3 months correlation between Elysee and Cardiff is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Elysee Development Corp and Cardiff Lexington Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Lexington Corp and Elysee Development 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 Elysee Development Corp are associated (or correlated) with Cardiff Lexington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Lexington Corp has no effect on the direction of Elysee Development i.e., Elysee Development and Cardiff Lexington go up and down completely randomly.

Pair Corralation between Elysee Development and Cardiff Lexington

Assuming the 90 days horizon Elysee Development Corp is expected to under-perform the Cardiff Lexington. But the pink sheet apears to be less risky and, when comparing its historical volatility, Elysee Development Corp is 3.01 times less risky than Cardiff Lexington. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Cardiff Lexington Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  700.00  in Cardiff Lexington Corp on September 13, 2024 and sell it today you would lose (400.00) from holding Cardiff Lexington Corp or give up 57.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Elysee Development Corp  vs.  Cardiff Lexington Corp

Elysee Development Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elysee Development Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elysee Development is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Cardiff Lexington Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardiff Lexington Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Cardiff Lexington is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elysee Development and Cardiff Lexington

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

The idea behind Elysee Development Corp and Cardiff Lexington Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.