Correlation Between Camellia Plc and EJF Investments

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

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

Diversification Opportunities for Camellia Plc and EJF Investments

0.0

Correlation Coefficient

Camellia Plc  EJF Investments

Pay attention - limited upside

The 3 months correlation between Camellia and EJF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Plc and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments and Camellia Plc 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 Camellia Plc are associated (or correlated) with EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Camellia Plc i.e., Camellia Plc and EJF Investments go up and down completely randomly.

Pair Corralation between Camellia Plc and EJF Investments

If you would invest  11,247  in EJF Investments on October 24, 2024 and sell it today you would earn a total of  1,503  from holding EJF Investments or generate 13.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Camellia Plc  vs.  EJF Investments

Camellia Plc

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Camellia Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Camellia Plc is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

EJF Investments

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EJF Investments are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EJF Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Camellia Plc and EJF Investments

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

The idea behind Camellia Plc and EJF Investments 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.