Correlation Between ELITE MEAT and LOTTOTECH

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

By analyzing existing cross correlation between ELITE MEAT PROCESSORS and LOTTOTECH LTD, you can compare the effects of market volatilities on ELITE MEAT and LOTTOTECH 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 ELITE MEAT with a short position of LOTTOTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELITE MEAT and LOTTOTECH.

Diversification Opportunities for ELITE MEAT and LOTTOTECH

-0.01

Correlation Coefficient

ELITE MEAT  LOTTOTECH

Good diversification

The 3 months correlation between ELITE and LOTTOTECH is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ELITE MEAT PROCESSORS and LOTTOTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOTTOTECH LTD and ELITE MEAT 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 ELITE MEAT PROCESSORS are associated (or correlated) with LOTTOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOTTOTECH LTD has no effect on the direction of ELITE MEAT i.e., ELITE MEAT and LOTTOTECH go up and down completely randomly.

Pair Corralation between ELITE MEAT and LOTTOTECH

Assuming the 90 days trading horizon ELITE MEAT PROCESSORS is expected to generate 0.54 times more return on investment than LOTTOTECH. However, ELITE MEAT PROCESSORS is 1.85 times less risky than LOTTOTECH. It trades about 0.16 of its potential returns per unit of risk. LOTTOTECH LTD is currently generating about -0.01 per unit of risk. If you would invest  185.00  in ELITE MEAT PROCESSORS on December 4, 2024 and sell it today you would earn a total of  10.00  from holding ELITE MEAT PROCESSORS or generate 5.41% return on investment over 90 days.

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

ELITE MEAT PROCESSORS  vs.  LOTTOTECH LTD

ELITE MEAT PROCESSORS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ELITE MEAT PROCESSORS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ELITE MEAT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

LOTTOTECH LTD

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ELITE MEAT and LOTTOTECH

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

The idea behind ELITE MEAT PROCESSORS and LOTTOTECH LTD 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.