Correlation Between Envela Corp and GANGLONG CHINA

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

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

Diversification Opportunities for Envela Corp and GANGLONG CHINA

-0.64

Correlation Coefficient

Envela Corp  GANGLONG CHINA

Excellent diversification

The 3 months correlation between Envela and GANGLONG is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Envela Corp and GANGLONG CHINA PRGRLTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GANGLONG CHINA PRGRLTD and Envela Corp 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 Envela Corp are associated (or correlated) with GANGLONG CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GANGLONG CHINA PRGRLTD has no effect on the direction of Envela Corp i.e., Envela Corp and GANGLONG CHINA go up and down completely randomly.

Pair Corralation between Envela Corp and GANGLONG CHINA

Assuming the 90 days trading horizon Envela Corp is expected to generate 0.38 times more return on investment than GANGLONG CHINA. However, Envela Corp is 2.67 times less risky than GANGLONG CHINA. It trades about 0.74 of its potential returns per unit of risk. GANGLONG CHINA PRGRLTD is currently generating about -0.25 per unit of risk. If you would invest  620.00  in Envela Corp on October 12, 2024 and sell it today you would earn a total of  50.00  from holding Envela Corp or generate 8.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	22.22%
Values	Daily Returns

Envela Corp  vs.  GANGLONG CHINA PRGRLTD

Envela Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

GANGLONG CHINA PRGRLTD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GANGLONG CHINA PRGRLTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, GANGLONG CHINA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Envela Corp and GANGLONG CHINA

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

The idea behind Envela Corp and GANGLONG CHINA PRGRLTD 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..