Correlation Between Avax SA and Ellaktor

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

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

Diversification Opportunities for Avax SA and Ellaktor

-0.18

Correlation Coefficient

Avax SA  Ellaktor

Good diversification

The 3 months correlation between Avax and Ellaktor is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Avax SA and Ellaktor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellaktor SA and Avax SA 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 Avax SA are associated (or correlated) with Ellaktor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellaktor SA has no effect on the direction of Avax SA i.e., Avax SA and Ellaktor go up and down completely randomly.

Pair Corralation between Avax SA and Ellaktor

Assuming the 90 days trading horizon Avax SA is expected to generate 0.53 times more return on investment than Ellaktor. However, Avax SA is 1.9 times less risky than Ellaktor. It trades about 0.23 of its potential returns per unit of risk. Ellaktor SA is currently generating about -0.08 per unit of risk. If you would invest  153.00  in Avax SA on December 29, 2024 and sell it today you would earn a total of  65.00  from holding Avax SA or generate 42.48% return on investment over 90 days.

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

Avax SA  vs.  Ellaktor SA

Avax SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Avax SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Avax SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ellaktor SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ellaktor SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Avax SA and Ellaktor

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

The idea behind Avax SA and Ellaktor SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..