Correlation Between Elin Electronics and Sunflag Iron

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

Diversification Opportunities for Elin Electronics and Sunflag Iron

0.81

Correlation Coefficient

Elin Electronics  Sunflag Iron

Very poor diversification

The 3 months correlation between Elin and Sunflag is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Elin Electronics Limited and Sunflag Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunflag Iron And 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 Sunflag Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunflag Iron And has no effect on the direction of Elin Electronics i.e., Elin Electronics and Sunflag Iron go up and down completely randomly.

Pair Corralation between Elin Electronics and Sunflag Iron

Assuming the 90 days trading horizon Elin Electronics Limited is expected to under-perform the Sunflag Iron. But the stock apears to be less risky and, when comparing its historical volatility, Elin Electronics Limited is 1.03 times less risky than Sunflag Iron. The stock trades about -0.24 of its potential returns per unit of risk. The Sunflag Iron And is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  27,905  in Sunflag Iron And on December 23, 2024 and sell it today you would lose (3,689) from holding Sunflag Iron And or give up 13.22% of portfolio value over 90 days.

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

Elin Electronics Limited  vs.  Sunflag Iron And

Elin Electronics

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sunflag Iron And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunflag Iron And has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Elin Electronics and Sunflag Iron

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

The idea behind Elin Electronics Limited and Sunflag Iron And 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.