Correlation Between E L and Mirasol Resources
Can any of the company-specific risk be diversified away by investing in both E L and Mirasol Resources 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 E L and Mirasol Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E L Financial Corp and Mirasol Resources, you can compare the effects of market volatilities on E L and Mirasol Resources 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 E L with a short position of Mirasol Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Mirasol Resources.
Diversification Opportunities for E L and Mirasol Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ELF and Mirasol is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Mirasol Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirasol Resources and E 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 E L Financial Corp are associated (or correlated) with Mirasol Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirasol Resources has no effect on the direction of E L i.e., E L and Mirasol Resources go up and down completely randomly.
Pair Corralation between E L and Mirasol Resources
Assuming the 90 days trading horizon E L is expected to generate 1.15 times less return on investment than Mirasol Resources. But when comparing it to its historical volatility, E L Financial Corp is 1.64 times less risky than Mirasol Resources. It trades about 0.28 of its potential returns per unit of risk. Mirasol Resources is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Mirasol Resources on September 6, 2024 and sell it today you would earn a total of 6.00 from holding Mirasol Resources or generate 13.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
E L Financial Corp vs. Mirasol Resources
Performance |
Timeline |
E L Financial |
Mirasol Resources |
E L and Mirasol Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with E L and Mirasol Resources
The main advantage of trading using opposite E L and Mirasol Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Mirasol Resources 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 Mirasol Resources will offset losses from the drop in Mirasol Resources' long position.E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
Mirasol Resources vs. Golden Arrow Resources | Mirasol Resources vs. EMX Royalty Corp | Mirasol Resources vs. Almaden Minerals | Mirasol Resources vs. Cordoba Minerals Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |