Correlation Between E L and Abacus Mining

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

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

Diversification Opportunities for E L and Abacus Mining

0.0

Correlation Coefficient

E L  Abacus Mining

Pay attention - limited upside

The 3 months correlation between ELF and Abacus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Abacus Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus Mining and E L 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 L Financial Corp are associated (or correlated) with Abacus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus Mining has no effect on the direction of E L i.e., E L and Abacus Mining go up and down completely randomly.

Pair Corralation between E L and Abacus Mining

If you would invest  84,814  in E L Financial Corp on March 15, 2024 and sell it today you would earn a total of  27,686  from holding E L Financial Corp or generate 32.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

E L Financial Corp  vs.  Abacus Mining and

E L Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, E L displayed solid returns over the last few months and may actually be approaching a breakup point.

Abacus Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Mining and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Abacus Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with E L and Abacus Mining

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

The idea behind E L Financial Corp and Abacus Mining and 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.