Correlation Between Elin Electronics and N B

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

By analyzing existing cross correlation between Elin Electronics Limited and N B I, you can compare the effects of market volatilities on Elin Electronics and N B 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 Elin Electronics with a short position of N B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elin Electronics and N B.

Diversification Opportunities for Elin Electronics and N B

0.09

Correlation Coefficient

Elin Electronics  N B

Significant diversification

The 3 months correlation between Elin and NBIFIN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Elin Electronics Limited and N B I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N B I and Elin Electronics 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 Elin Electronics Limited are associated (or correlated) with N B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N B I has no effect on the direction of Elin Electronics i.e., Elin Electronics and N B go up and down completely randomly.

Pair Corralation between Elin Electronics and N B

Assuming the 90 days trading horizon Elin Electronics is expected to generate 2.31 times less return on investment than N B. In addition to that, Elin Electronics is 1.07 times more volatile than N B I. It trades about 0.03 of its total potential returns per unit of risk. N B I is currently generating about 0.07 per unit of volatility. If you would invest  186,201  in N B I on October 22, 2024 and sell it today you would earn a total of  75,299  from holding N B I or generate 40.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.56%
Values	Daily Returns

Elin Electronics Limited  vs.  N B I

Elin Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elin Electronics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

N B I

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Elin Electronics and N B

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

The idea behind Elin Electronics Limited and N B I 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.