Correlation Between More Return and E For

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

By analyzing existing cross correlation between More Return Public and E for L, you can compare the effects of market volatilities on More Return and E For 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 More Return with a short position of E For. Check out your portfolio center. Please also check ongoing floating volatility patterns of More Return and E For.

Diversification Opportunities for More Return and E For

0.21

Correlation Coefficient

More Return  E For

Modest diversification

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

Pair Corralation between More Return and E For

Assuming the 90 days trading horizon More Return Public is expected to generate 6.94 times more return on investment than E For. However, More Return is 6.94 times more volatile than E for L. It trades about 0.15 of its potential returns per unit of risk. E for L is currently generating about -0.2 per unit of risk. If you would invest  2.00  in More Return Public on December 27, 2024 and sell it today you would earn a total of  1.00  from holding More Return Public or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

More Return Public  vs.  E for L

More Return Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in More Return Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, More Return disclosed solid returns over the last few months and may actually be approaching a breakup point.

E for L

Risk-Adjusted Performance

Very Weak

Over the last 90 days E for L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with More Return and E For

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

The idea behind More Return Public and E for L 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.