Correlation Between Elcom International and Donnelley Financial

Can any of the company-specific risk be diversified away by investing in both Elcom International and Donnelley Financial 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 Elcom International and Donnelley Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elcom International and Donnelley Financial Solutions, you can compare the effects of market volatilities on Elcom International and Donnelley Financial 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 Elcom International with a short position of Donnelley Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom International and Donnelley Financial.

Diversification Opportunities for Elcom International and Donnelley Financial

0.0

Correlation Coefficient

Elcom International  Donnelley Financial

Pay attention - limited upside

The 3 months correlation between Elcom and Donnelley is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elcom International and Donnelley Financial Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donnelley Financial and Elcom International 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 Elcom International are associated (or correlated) with Donnelley Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donnelley Financial has no effect on the direction of Elcom International i.e., Elcom International and Donnelley Financial go up and down completely randomly.

Pair Corralation between Elcom International and Donnelley Financial

If you would invest (100.00) in Elcom International on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Elcom International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elcom International  vs.  Donnelley Financial Solutions

Elcom International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elcom International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Elcom International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Donnelley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Donnelley Financial Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Elcom International and Donnelley Financial

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

The idea behind Elcom International and Donnelley Financial Solutions 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.