Correlation Between E Split and Freehold Royalties

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

By analyzing existing cross correlation between E Split Corp and Freehold Royalties, you can compare the effects of market volatilities on E Split and Freehold Royalties 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 E Split with a short position of Freehold Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Freehold Royalties.

Diversification Opportunities for E Split and Freehold Royalties

0.14

Correlation Coefficient

E Split  Freehold Royalties

Average diversification

The 3 months correlation between ENS and Freehold is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Freehold Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freehold Royalties and E Split 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 E Split Corp are associated (or correlated) with Freehold Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freehold Royalties has no effect on the direction of E Split i.e., E Split and Freehold Royalties go up and down completely randomly.

Pair Corralation between E Split and Freehold Royalties

Assuming the 90 days trading horizon E Split Corp is expected to generate 0.82 times more return on investment than Freehold Royalties. However, E Split Corp is 1.22 times less risky than Freehold Royalties. It trades about 0.17 of its potential returns per unit of risk. Freehold Royalties is currently generating about 0.01 per unit of risk. If you would invest  1,245  in E Split Corp on September 13, 2024 and sell it today you would earn a total of  135.00  from holding E Split Corp or generate 10.84% return on investment over 90 days.

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

E Split Corp  vs.  Freehold Royalties

E Split Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, E Split may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Freehold Royalties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freehold Royalties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Freehold Royalties is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with E Split and Freehold Royalties

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

The idea behind E Split Corp and Freehold Royalties 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.