Correlation Between E For and Getabec Public

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

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

Diversification Opportunities for E For and Getabec Public

-0.82

Correlation Coefficient

E For  Getabec Public

Pay attention - limited upside

The 3 months correlation between EFORL and Getabec is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding E for L and Getabec Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getabec Public and E For 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 E for L are associated (or correlated) with Getabec Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getabec Public has no effect on the direction of E For i.e., E For and Getabec Public go up and down completely randomly.

Pair Corralation between E For and Getabec Public

Assuming the 90 days trading horizon E for L is expected to under-perform the Getabec Public. In addition to that, E For is 1.11 times more volatile than Getabec Public. It trades about -0.37 of its total potential returns per unit of risk. Getabec Public is currently generating about -0.05 per unit of volatility. If you would invest  72.00  in Getabec Public on March 19, 2024 and sell it today you would lose (1.00) from holding Getabec Public or give up 1.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

E for L  vs.  Getabec Public

E for L

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Getabec Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Getabec Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Getabec Public may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with E For and Getabec Public

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

The idea behind E for L and Getabec Public 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.