Correlation Between Elaia Investment and Commcenter

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

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

Diversification Opportunities for Elaia Investment and Commcenter

0.53

Correlation Coefficient

Elaia Investment  Commcenter

Very weak diversification

The 3 months correlation between Elaia and Commcenter is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Elaia Investment Spain and Commcenter SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commcenter SA and Elaia Investment 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 Elaia Investment Spain are associated (or correlated) with Commcenter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commcenter SA has no effect on the direction of Elaia Investment i.e., Elaia Investment and Commcenter go up and down completely randomly.

Pair Corralation between Elaia Investment and Commcenter

Assuming the 90 days trading horizon Elaia Investment Spain is expected to under-perform the Commcenter. In addition to that, Elaia Investment is 11.1 times more volatile than Commcenter SA. It trades about 0.0 of its total potential returns per unit of risk. Commcenter SA is currently generating about 0.01 per unit of volatility. If you would invest  199.00  in Commcenter SA on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Commcenter SA or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Elaia Investment Spain  vs.  Commcenter SA

Elaia Investment Spain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elaia Investment Spain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Commcenter SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commcenter SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Commcenter is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elaia Investment and Commcenter

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

The idea behind Elaia Investment Spain and Commcenter SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..