Correlation Between Elco and Infimer
Can any of the company-specific risk be diversified away by investing in both Elco and Infimer 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 Elco and Infimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elco and Infimer, you can compare the effects of market volatilities on Elco and Infimer 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 Elco with a short position of Infimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elco and Infimer.
Diversification Opportunities for Elco and Infimer
Very good diversification
The 3 months correlation between Elco and Infimer is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Elco and Infimer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infimer and Elco 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 Elco are associated (or correlated) with Infimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infimer has no effect on the direction of Elco i.e., Elco and Infimer go up and down completely randomly.
Pair Corralation between Elco and Infimer
Assuming the 90 days trading horizon Elco is expected to generate 77.95 times less return on investment than Infimer. But when comparing it to its historical volatility, Elco is 121.92 times less risky than Infimer. It trades about 0.38 of its potential returns per unit of risk. Infimer is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Infimer on September 14, 2024 and sell it today you would earn a total of 1,418 from holding Infimer or generate 3376.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Elco vs. Infimer
Performance |
Timeline |
Elco |
Infimer |
Elco and Infimer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elco and Infimer
The main advantage of trading using opposite Elco and Infimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elco position performs unexpectedly, Infimer 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 Infimer will offset losses from the drop in Infimer's long position.Elco vs. Aran Research and | Elco vs. Al Bad Massuot Yitzhak | Elco vs. Analyst IMS Investment | Elco vs. Golan Plastic |
Infimer vs. Migdal Insurance | Infimer vs. Altshuler Shaham Financial | Infimer vs. Bio Meat Foodtech | Infimer vs. Ormat Technologies |
Check out your portfolio center.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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