Correlation Between Elixinol Global and Captiva Verde

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

By analyzing existing cross correlation between Elixinol Global and Captiva Verde Land, you can compare the effects of market volatilities on Elixinol Global and Captiva Verde 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 Elixinol Global with a short position of Captiva Verde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elixinol Global and Captiva Verde.

Diversification Opportunities for Elixinol Global and Captiva Verde

-0.42

Correlation Coefficient

Elixinol Global  Captiva Verde

Very good diversification

The 3 months correlation between Elixinol and Captiva is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Elixinol Global and Captiva Verde Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captiva Verde Land and Elixinol Global 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 Elixinol Global are associated (or correlated) with Captiva Verde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captiva Verde Land has no effect on the direction of Elixinol Global i.e., Elixinol Global and Captiva Verde go up and down completely randomly.

Pair Corralation between Elixinol Global and Captiva Verde

Assuming the 90 days horizon Elixinol Global is expected to generate 2.74 times more return on investment than Captiva Verde. However, Elixinol Global is 2.74 times more volatile than Captiva Verde Land. It trades about 0.19 of its potential returns per unit of risk. Captiva Verde Land is currently generating about 0.18 per unit of risk. If you would invest  0.26  in Elixinol Global on September 16, 2024 and sell it today you would earn a total of  0.24  from holding Elixinol Global or generate 92.31% return on investment over 90 days.

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

Elixinol Global  vs.  Captiva Verde Land

Elixinol Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elixinol Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Elixinol Global reported solid returns over the last few months and may actually be approaching a breakup point.

Captiva Verde Land

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Captiva Verde Land are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Captiva Verde reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elixinol Global and Captiva Verde

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

The idea behind Elixinol Global and Captiva Verde Land 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.