Correlation Between Western Investment and E L
Can any of the company-specific risk be diversified away by investing in both Western Investment and E L 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 Western Investment and E L into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Investment and E L Financial 3, you can compare the effects of market volatilities on Western Investment and E L 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 Western Investment with a short position of E L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Investment and E L.
Diversification Opportunities for Western Investment and E L
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and ELF-PH is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Western Investment and E L Financial 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E L Financial and Western 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 Western Investment are associated (or correlated) with E L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E L Financial has no effect on the direction of Western Investment i.e., Western Investment and E L go up and down completely randomly.
Pair Corralation between Western Investment and E L
Given the investment horizon of 90 days Western Investment is expected to generate 8.45 times more return on investment than E L. However, Western Investment is 8.45 times more volatile than E L Financial 3. It trades about 0.32 of its potential returns per unit of risk. E L Financial 3 is currently generating about 0.18 per unit of risk. If you would invest 40.00 in Western Investment on September 25, 2024 and sell it today you would earn a total of 14.00 from holding Western Investment or generate 35.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Western Investment vs. E L Financial 3
Performance |
Timeline |
Western Investment |
E L Financial |
Western Investment and E L Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Investment and E L
The main advantage of trading using opposite Western Investment and E L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Investment position performs unexpectedly, E L 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 E L will offset losses from the drop in E L's long position.Western Investment vs. Endeavour Silver Corp | Western Investment vs. Ramp Metals | Western Investment vs. Arbor Metals Corp | Western Investment vs. Aya Gold Silver |
E L vs. Western Investment | E L vs. Medical Facilities | E L vs. Canadian General Investments | E L vs. 2028 Investment Grade |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |