Correlation Between Electrovaya Common and Genting Singapore

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

By analyzing existing cross correlation between Electrovaya Common Shares and Genting Singapore PLC, you can compare the effects of market volatilities on Electrovaya Common and Genting Singapore 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 Electrovaya Common with a short position of Genting Singapore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Genting Singapore.

Diversification Opportunities for Electrovaya Common and Genting Singapore

-0.47

Correlation Coefficient

Electrovaya Common  Genting Singapore

Very good diversification

The 3 months correlation between Electrovaya and Genting is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Genting Singapore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genting Singapore PLC and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with Genting Singapore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genting Singapore PLC has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Genting Singapore go up and down completely randomly.

Pair Corralation between Electrovaya Common and Genting Singapore

Given the investment horizon of 90 days Electrovaya Common Shares is expected to generate 1.4 times more return on investment than Genting Singapore. However, Electrovaya Common is 1.4 times more volatile than Genting Singapore PLC. It trades about 0.12 of its potential returns per unit of risk. Genting Singapore PLC is currently generating about 0.0 per unit of risk. If you would invest  218.00  in Electrovaya Common Shares on September 14, 2024 and sell it today you would earn a total of  67.00  from holding Electrovaya Common Shares or generate 30.73% return on investment over 90 days.

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

Electrovaya Common Shares  vs.  Genting Singapore PLC

Electrovaya Common Shares

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

Genting Singapore PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genting Singapore PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Genting Singapore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Electrovaya Common and Genting Singapore

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

The idea behind Electrovaya Common Shares and Genting Singapore PLC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.