Correlation Between Elastic NV and MF International

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Can any of the company-specific risk be diversified away by investing in both Elastic NV and MF 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 Elastic NV and MF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elastic NV and mF International Limited, you can compare the effects of market volatilities on Elastic NV and MF 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 Elastic NV with a short position of MF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elastic NV and MF International.

Diversification Opportunities for Elastic NV and MF International

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Elastic and MFI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Elastic NV and mF International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mF International and Elastic NV 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 Elastic NV are associated (or correlated) with MF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mF International has no effect on the direction of Elastic NV i.e., Elastic NV and MF International go up and down completely randomly.

Pair Corralation between Elastic NV and MF International

Given the investment horizon of 90 days Elastic NV is expected to generate 0.36 times more return on investment than MF International. However, Elastic NV is 2.81 times less risky than MF International. It trades about 0.06 of its potential returns per unit of risk. mF International Limited is currently generating about -0.1 per unit of risk. If you would invest  4,930  in Elastic NV on September 18, 2024 and sell it today you would earn a total of  5,714  from holding Elastic NV or generate 115.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy33.67%
ValuesDaily Returns

Elastic NV  vs.  mF International Limited

 Performance 
       Timeline  
Elastic NV 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Elastic NV are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Elastic NV exhibited solid returns over the last few months and may actually be approaching a breakup point.
mF International 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in mF International Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, MF International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Elastic NV and MF International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Elastic NV and MF International

The main advantage of trading using opposite Elastic NV and MF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elastic NV position performs unexpectedly, MF 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 MF International will offset losses from the drop in MF International's long position.
The idea behind Elastic NV and mF International Limited 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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