Correlation Between Elong Power and GrafTech International

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

By analyzing existing cross correlation between Elong Power Holding and GrafTech International, you can compare the effects of market volatilities on Elong Power and GrafTech International 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 Elong Power with a short position of GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elong Power and GrafTech International.

Diversification Opportunities for Elong Power and GrafTech International

-0.64

Correlation Coefficient

Elong Power  GrafTech International

Excellent diversification

The 3 months correlation between Elong and GrafTech is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elong Power Holding and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International and Elong Power 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 Elong Power Holding are associated (or correlated) with GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of Elong Power i.e., Elong Power and GrafTech International go up and down completely randomly.

Pair Corralation between Elong Power and GrafTech International

Given the investment horizon of 90 days Elong Power Holding is expected to under-perform the GrafTech International. In addition to that, Elong Power is 1.83 times more volatile than GrafTech International. It trades about -0.22 of its total potential returns per unit of risk. GrafTech International is currently generating about 0.25 per unit of volatility. If you would invest  81.00  in GrafTech International on September 16, 2024 and sell it today you would earn a total of  122.00  from holding GrafTech International or generate 150.62% return on investment over 90 days.

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

Elong Power Holding  vs.  GrafTech International

Elong Power Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elong Power Holding 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 fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

GrafTech International

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GrafTech International are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, GrafTech International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elong Power and GrafTech International

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

The idea behind Elong Power Holding and GrafTech International 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.