Correlation Between Electreon Wireless and Jacob Finance

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

By analyzing existing cross correlation between Electreon Wireless and Jacob Finance And, you can compare the effects of market volatilities on Electreon Wireless and Jacob Finance 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 Electreon Wireless with a short position of Jacob Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electreon Wireless and Jacob Finance.

Diversification Opportunities for Electreon Wireless and Jacob Finance

0.21

Correlation Coefficient

Electreon Wireless  Jacob Finance

Modest diversification

The 3 months correlation between Electreon and Jacob is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Electreon Wireless and Jacob Finance And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Finance And and Electreon Wireless 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 Electreon Wireless are associated (or correlated) with Jacob Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Finance And has no effect on the direction of Electreon Wireless i.e., Electreon Wireless and Jacob Finance go up and down completely randomly.

Pair Corralation between Electreon Wireless and Jacob Finance

Assuming the 90 days trading horizon Electreon Wireless is expected to generate 2.57 times more return on investment than Jacob Finance. However, Electreon Wireless is 2.57 times more volatile than Jacob Finance And. It trades about 0.1 of its potential returns per unit of risk. Jacob Finance And is currently generating about 0.07 per unit of risk. If you would invest  332,400  in Electreon Wireless on October 9, 2024 and sell it today you would earn a total of  1,498,600  from holding Electreon Wireless or generate 450.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.74%
Values	Daily Returns

Electreon Wireless  vs.  Jacob Finance And

Electreon Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Electreon Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Jacob Finance And

Risk-Adjusted Performance

19 of 100

Solid

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

Pair Trading with Electreon Wireless and Jacob Finance

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

The idea behind Electreon Wireless and Jacob Finance 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.