Correlation Between Eline Entertainment and Intouch Insight

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

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

Diversification Opportunities for Eline Entertainment and Intouch Insight

-0.11

Correlation Coefficient

Eline Entertainment  Intouch Insight

Good diversification

The 3 months correlation between Eline and Intouch is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eline Entertainment Group and Intouch Insight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Insight and Eline Entertainment 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 Eline Entertainment Group are associated (or correlated) with Intouch Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Insight has no effect on the direction of Eline Entertainment i.e., Eline Entertainment and Intouch Insight go up and down completely randomly.

Pair Corralation between Eline Entertainment and Intouch Insight

Given the investment horizon of 90 days Eline Entertainment Group is expected to generate 5.55 times more return on investment than Intouch Insight. However, Eline Entertainment is 5.55 times more volatile than Intouch Insight. It trades about 0.18 of its potential returns per unit of risk. Intouch Insight is currently generating about 0.11 per unit of risk. If you would invest  0.01  in Eline Entertainment Group on September 12, 2024 and sell it today you would earn a total of  0.01  from holding Eline Entertainment Group or generate 100.0% return on investment over 90 days.

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

Eline Entertainment Group  vs.  Intouch Insight

Eline Entertainment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eline Entertainment Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical and fundamental indicators, Eline Entertainment demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Intouch Insight

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intouch Insight are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Intouch Insight reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eline Entertainment and Intouch Insight

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

The idea behind Eline Entertainment Group and Intouch Insight 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.