Correlation Between Elcom International and LYFT

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

By analyzing existing cross correlation between Elcom International and LYFT Inc, you can compare the effects of market volatilities on Elcom International and LYFT 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 LYFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom International and LYFT.

Diversification Opportunities for Elcom International and LYFT

-0.53

Correlation Coefficient

Elcom International  LYFT

Excellent diversification

The 3 months correlation between Elcom and LYFT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Elcom International and LYFT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYFT Inc 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 LYFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYFT Inc has no effect on the direction of Elcom International i.e., Elcom International and LYFT go up and down completely randomly.

Pair Corralation between Elcom International and LYFT

If you would invest  1,135  in LYFT Inc on September 2, 2024 and sell it today you would earn a total of  601.00  from holding LYFT Inc or generate 52.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Elcom International  vs.  LYFT Inc

Elcom International

Risk-Adjusted Performance

0 of 100

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.

LYFT Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LYFT Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, LYFT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elcom International and LYFT

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

The idea behind Elcom International and LYFT Inc 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.