Correlation Between EJF Investments and National Atomic

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

By analyzing existing cross correlation between EJF Investments and National Atomic Co, you can compare the effects of market volatilities on EJF Investments and National Atomic 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 National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and National Atomic.

Diversification Opportunities for EJF Investments and National Atomic

-0.43

Correlation Coefficient

EJF Investments  National Atomic

Very good diversification

The 3 months correlation between EJF and National is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic 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 National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of EJF Investments i.e., EJF Investments and National Atomic go up and down completely randomly.

Pair Corralation between EJF Investments and National Atomic

Assuming the 90 days trading horizon EJF Investments is expected to generate 0.66 times more return on investment than National Atomic. However, EJF Investments is 1.51 times less risky than National Atomic. It trades about 0.06 of its potential returns per unit of risk. National Atomic Co is currently generating about -0.01 per unit of risk. If you would invest  9,860  in EJF Investments on October 9, 2024 and sell it today you would earn a total of  2,040  from holding EJF Investments or generate 20.69% return on investment over 90 days.

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

EJF Investments  vs.  National Atomic Co

EJF Investments

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EJF Investments are ranked lower than 10 (%) 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 February 2025.

National Atomic

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Atomic Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EJF Investments and National Atomic

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

The idea behind EJF Investments and National Atomic Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.