Correlation Between Eldav L and Salomon A

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

By analyzing existing cross correlation between Eldav L and Salomon A Angel, you can compare the effects of market volatilities on Eldav L and Salomon A 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 Eldav L with a short position of Salomon A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldav L and Salomon A.

Diversification Opportunities for Eldav L and Salomon A

-0.36

Correlation Coefficient

Eldav L  Salomon A

Very good diversification

The 3 months correlation between Eldav and Salomon is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eldav L and Salomon A Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salomon A Angel and Eldav L 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 Eldav L are associated (or correlated) with Salomon A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salomon A Angel has no effect on the direction of Eldav L i.e., Eldav L and Salomon A go up and down completely randomly.

Pair Corralation between Eldav L and Salomon A

Assuming the 90 days trading horizon Eldav L is expected to under-perform the Salomon A. But the stock apears to be less risky and, when comparing its historical volatility, Eldav L is 1.46 times less risky than Salomon A. The stock trades about 0.0 of its potential returns per unit of risk. The Salomon A Angel is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  310,000  in Salomon A Angel on October 26, 2024 and sell it today you would earn a total of  4,100  from holding Salomon A Angel or generate 1.32% return on investment over 90 days.

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

Eldav L  vs.  Salomon A Angel

Eldav L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eldav L has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eldav L is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Salomon A Angel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salomon A Angel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Salomon A is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eldav L and Salomon A

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

The idea behind Eldav L and Salomon A Angel 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.