Correlation Between Maytronics and Electreon Wireless

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

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

Diversification Opportunities for Maytronics and Electreon Wireless

0.36

Correlation Coefficient

Maytronics  Electreon Wireless

Weak diversification

The 3 months correlation between Maytronics and Electreon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Maytronics and Electreon Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electreon Wireless and Maytronics 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 Maytronics are associated (or correlated) with Electreon Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electreon Wireless has no effect on the direction of Maytronics i.e., Maytronics and Electreon Wireless go up and down completely randomly.

Pair Corralation between Maytronics and Electreon Wireless

Assuming the 90 days trading horizon Maytronics is expected to under-perform the Electreon Wireless. In addition to that, Maytronics is 1.06 times more volatile than Electreon Wireless. It trades about -0.34 of its total potential returns per unit of risk. Electreon Wireless is currently generating about -0.14 per unit of volatility. If you would invest  1,790,000  in Electreon Wireless on December 30, 2024 and sell it today you would lose (545,000) from holding Electreon Wireless or give up 30.45% of portfolio value over 90 days.

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

Maytronics  vs.  Electreon Wireless

Maytronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maytronics 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 basic indicators 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.

Electreon Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electreon Wireless 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 basic indicators 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 Maytronics and Electreon Wireless

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

The idea behind Maytronics and Electreon Wireless 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 Transaction History module to view history of all your transactions and understand their impact on performance.