Correlation Between Mrs Bectors and Elin Electronics

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

By analyzing existing cross correlation between Mrs Bectors Food and Elin Electronics Limited, you can compare the effects of market volatilities on Mrs Bectors and Elin Electronics 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 Mrs Bectors with a short position of Elin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mrs Bectors and Elin Electronics.

Diversification Opportunities for Mrs Bectors and Elin Electronics

0.8

Correlation Coefficient

Mrs Bectors  Elin Electronics

Very poor diversification

The 3 months correlation between Mrs and Elin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mrs Bectors Food and Elin Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elin Electronics and Mrs Bectors 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 Mrs Bectors Food are associated (or correlated) with Elin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elin Electronics has no effect on the direction of Mrs Bectors i.e., Mrs Bectors and Elin Electronics go up and down completely randomly.

Pair Corralation between Mrs Bectors and Elin Electronics

Assuming the 90 days trading horizon Mrs Bectors Food is expected to generate 0.96 times more return on investment than Elin Electronics. However, Mrs Bectors Food is 1.05 times less risky than Elin Electronics. It trades about 0.11 of its potential returns per unit of risk. Elin Electronics Limited is currently generating about 0.0 per unit of risk. If you would invest  47,208  in Mrs Bectors Food on October 10, 2024 and sell it today you would earn a total of  112,762  from holding Mrs Bectors Food or generate 238.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.39%
Values	Daily Returns

Mrs Bectors Food  vs.  Elin Electronics Limited

Mrs Bectors Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mrs Bectors Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Elin Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elin Electronics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Mrs Bectors and Elin Electronics

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

The idea behind Mrs Bectors Food and Elin Electronics Limited 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.