Correlation Between EJF Investments and Auction Technology

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

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

Diversification Opportunities for EJF Investments and Auction Technology

0.26

Correlation Coefficient

EJF Investments  Auction Technology

Modest diversification

The 3 months correlation between EJF and Auction is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology and EJF Investments 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 EJF Investments are associated (or correlated) with Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of EJF Investments i.e., EJF Investments and Auction Technology go up and down completely randomly.

Pair Corralation between EJF Investments and Auction Technology

Assuming the 90 days trading horizon EJF Investments is expected to generate 1.19 times more return on investment than Auction Technology. However, EJF Investments is 1.19 times more volatile than Auction Technology Group. It trades about 0.05 of its potential returns per unit of risk. Auction Technology Group is currently generating about 0.03 per unit of risk. If you would invest  11,733  in EJF Investments on December 22, 2024 and sell it today you would earn a total of  617.00  from holding EJF Investments or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

EJF Investments  vs.  Auction Technology Group

EJF Investments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EJF Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EJF Investments may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Auction Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Auction Technology Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Auction Technology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EJF Investments and Auction Technology

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

The idea behind EJF Investments and Auction Technology Group 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..