Correlation Between Elin Electronics and Punjab National

Can any of the company-specific risk be diversified away by investing in both Elin Electronics and Punjab National 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 Punjab National 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 Punjab National Bank, you can compare the effects of market volatilities on Elin Electronics and Punjab National 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 Punjab National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elin Electronics and Punjab National.

Diversification Opportunities for Elin Electronics and Punjab National

0.54

Correlation Coefficient

Elin Electronics  Punjab National

Very weak diversification

The 3 months correlation between Elin and Punjab is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Elin Electronics Limited and Punjab National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab National Bank 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 Punjab National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab National Bank has no effect on the direction of Elin Electronics i.e., Elin Electronics and Punjab National go up and down completely randomly.

Pair Corralation between Elin Electronics and Punjab National

Assuming the 90 days trading horizon Elin Electronics Limited is expected to under-perform the Punjab National. In addition to that, Elin Electronics is 1.59 times more volatile than Punjab National Bank. It trades about -0.22 of its total potential returns per unit of risk. Punjab National Bank is currently generating about -0.17 per unit of volatility. If you would invest  10,877  in Punjab National Bank on October 10, 2024 and sell it today you would lose (680.00) from holding Punjab National Bank or give up 6.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Elin Electronics Limited  vs.  Punjab National Bank

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.

Punjab National Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Punjab National Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Punjab National is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elin Electronics and Punjab National

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

The idea behind Elin Electronics Limited and Punjab National Bank 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.