Correlation Between Electreon Wireless and Retailors

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

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

Diversification Opportunities for Electreon Wireless and Retailors

-0.27

Correlation Coefficient

Electreon Wireless  Retailors

Very good diversification

The 3 months correlation between Electreon and Retailors is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Electreon Wireless and Retailors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailors 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 Retailors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailors has no effect on the direction of Electreon Wireless i.e., Electreon Wireless and Retailors go up and down completely randomly.

Pair Corralation between Electreon Wireless and Retailors

Assuming the 90 days trading horizon Electreon Wireless is expected to generate 14.69 times less return on investment than Retailors. In addition to that, Electreon Wireless is 1.61 times more volatile than Retailors. It trades about 0.01 of its total potential returns per unit of risk. Retailors is currently generating about 0.14 per unit of volatility. If you would invest  630,100  in Retailors on October 22, 2024 and sell it today you would earn a total of  104,800  from holding Retailors or generate 16.63% return on investment over 90 days.

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

Electreon Wireless  vs.  Retailors

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 somewhat strong basic indicators, Electreon Wireless is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Retailors

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Electreon Wireless and Retailors

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

The idea behind Electreon Wireless and Retailors 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.