Correlation Between Flux Power and Elong Power
Can any of the company-specific risk be diversified away by investing in both Flux Power and Elong Power 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 Flux Power and Elong Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flux Power Holdings and Elong Power Holding, you can compare the effects of market volatilities on Flux Power and Elong Power 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 Flux Power with a short position of Elong Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Elong Power.
Diversification Opportunities for Flux Power and Elong Power
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flux and Elong is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and Elong Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elong Power Holding and Flux Power 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 Flux Power Holdings are associated (or correlated) with Elong Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elong Power Holding has no effect on the direction of Flux Power i.e., Flux Power and Elong Power go up and down completely randomly.
Pair Corralation between Flux Power and Elong Power
Given the investment horizon of 90 days Flux Power Holdings is expected to generate 0.69 times more return on investment than Elong Power. However, Flux Power Holdings is 1.46 times less risky than Elong Power. It trades about -0.34 of its potential returns per unit of risk. Elong Power Holding is currently generating about -0.38 per unit of risk. If you would invest 175.00 in Flux Power Holdings on December 5, 2024 and sell it today you would lose (46.00) from holding Flux Power Holdings or give up 26.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Flux Power Holdings vs. Elong Power Holding
Performance |
Timeline |
Flux Power Holdings |
Elong Power Holding |
Flux Power and Elong Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flux Power and Elong Power
The main advantage of trading using opposite Flux Power and Elong Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power position performs unexpectedly, Elong Power 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 Elong Power will offset losses from the drop in Elong Power's long position.Flux Power vs. Espey Mfg Electronics | Flux Power vs. NeoVolta Warrant | Flux Power vs. Kimball Electronics | Flux Power vs. Hayward Holdings |
Elong Power vs. Insteel Industries | Elong Power vs. Gfl Environmental Holdings | Elong Power vs. Tianjin Capital Environmental | Elong Power vs. Acumen Pharmaceuticals |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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