Correlation Between Electra Co and Accel Solutions
Can any of the company-specific risk be diversified away by investing in both Electra Co and Accel Solutions 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 Electra Co and Accel Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Co Pr and Accel Solutions Group, you can compare the effects of market volatilities on Electra Co and Accel Solutions 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 Electra Co with a short position of Accel Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Co and Accel Solutions.
Diversification Opportunities for Electra Co and Accel Solutions
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electra and Accel is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Electra Co Pr and Accel Solutions Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Solutions Group and Electra Co 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 Electra Co Pr are associated (or correlated) with Accel Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Solutions Group has no effect on the direction of Electra Co i.e., Electra Co and Accel Solutions go up and down completely randomly.
Pair Corralation between Electra Co and Accel Solutions
Assuming the 90 days trading horizon Electra Co Pr is expected to generate 0.76 times more return on investment than Accel Solutions. However, Electra Co Pr is 1.31 times less risky than Accel Solutions. It trades about 0.28 of its potential returns per unit of risk. Accel Solutions Group is currently generating about -0.04 per unit of risk. If you would invest 944,300 in Electra Co Pr on September 25, 2024 and sell it today you would earn a total of 103,700 from holding Electra Co Pr or generate 10.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Electra Co Pr vs. Accel Solutions Group
Performance |
Timeline |
Electra Co Pr |
Accel Solutions Group |
Electra Co and Accel Solutions Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electra Co and Accel Solutions
The main advantage of trading using opposite Electra Co and Accel Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Co position performs unexpectedly, Accel Solutions 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 Accel Solutions will offset losses from the drop in Accel Solutions' long position.Electra Co vs. Bank Leumi Le Israel | Electra Co vs. Mizrahi Tefahot | Electra Co vs. Norstar | Electra Co vs. Gazit Globe |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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