Correlation Between Eldav L and Export Inv

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

By analyzing existing cross correlation between Eldav L and Export Inv, you can compare the effects of market volatilities on Eldav L and Export Inv 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 Export Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldav L and Export Inv.

Diversification Opportunities for Eldav L and Export Inv

0.14

Correlation Coefficient

Eldav L  Export Inv

Average diversification

The 3 months correlation between Eldav and Export is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eldav L and Export Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Export Inv 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 Export Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Export Inv has no effect on the direction of Eldav L i.e., Eldav L and Export Inv go up and down completely randomly.

Pair Corralation between Eldav L and Export Inv

Assuming the 90 days trading horizon Eldav L is expected to generate 0.82 times more return on investment than Export Inv. However, Eldav L is 1.22 times less risky than Export Inv. It trades about -0.04 of its potential returns per unit of risk. Export Inv is currently generating about -0.09 per unit of risk. If you would invest  26,420  in Eldav L on October 26, 2024 and sell it today you would lose (420.00) from holding Eldav L or give up 1.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Eldav L  vs.  Export Inv

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.

Export Inv

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Export Inv are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Export Inv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eldav L and Export Inv

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

The idea behind Eldav L and Export Inv 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.