Correlation Between TOLEDO and Electrovaya Common

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

By analyzing existing cross correlation between TOLEDO HOSP 5325 and Electrovaya Common Shares, you can compare the effects of market volatilities on TOLEDO and Electrovaya Common 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 TOLEDO with a short position of Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOLEDO and Electrovaya Common.

Diversification Opportunities for TOLEDO and Electrovaya Common

-0.03

Correlation Coefficient

TOLEDO  Electrovaya Common

Good diversification

The 3 months correlation between TOLEDO and Electrovaya is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding TOLEDO HOSP 5325 and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares and TOLEDO 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 TOLEDO HOSP 5325 are associated (or correlated) with Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of TOLEDO i.e., TOLEDO and Electrovaya Common go up and down completely randomly.

Pair Corralation between TOLEDO and Electrovaya Common

Assuming the 90 days trading horizon TOLEDO HOSP 5325 is expected to under-perform the Electrovaya Common. In addition to that, TOLEDO is 1.36 times more volatile than Electrovaya Common Shares. It trades about -0.07 of its total potential returns per unit of risk. Electrovaya Common Shares is currently generating about 0.04 per unit of volatility. If you would invest  233.00  in Electrovaya Common Shares on September 30, 2024 and sell it today you would earn a total of  12.00  from holding Electrovaya Common Shares or generate 5.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.19%
Values	Daily Returns

TOLEDO HOSP 5325  vs.  Electrovaya Common Shares

TOLEDO HOSP 5325

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOLEDO HOSP 5325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for TOLEDO HOSP 5325 investors.

Electrovaya Common Shares

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Electrovaya Common may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TOLEDO and Electrovaya Common

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

The idea behind TOLEDO HOSP 5325 and Electrovaya Common Shares 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.