Correlation Between Exela Technologies and Computers Portfolio

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

By analyzing existing cross correlation between Exela Technologies Preferred and Computers Portfolio Puters, you can compare the effects of market volatilities on Exela Technologies and Computers Portfolio 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 Exela Technologies with a short position of Computers Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Computers Portfolio.

Diversification Opportunities for Exela Technologies and Computers Portfolio

-0.38

Correlation Coefficient

Exela Technologies  Computers Portfolio

Very good diversification

The 3 months correlation between Exela and Computers is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Computers Portfolio Puters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computers Portfolio and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Computers Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computers Portfolio has no effect on the direction of Exela Technologies i.e., Exela Technologies and Computers Portfolio go up and down completely randomly.

Pair Corralation between Exela Technologies and Computers Portfolio

Assuming the 90 days horizon Exela Technologies Preferred is expected to under-perform the Computers Portfolio. In addition to that, Exela Technologies is 6.33 times more volatile than Computers Portfolio Puters. It trades about -0.22 of its total potential returns per unit of risk. Computers Portfolio Puters is currently generating about 0.12 per unit of volatility. If you would invest  10,764  in Computers Portfolio Puters on September 5, 2024 and sell it today you would earn a total of  784.00  from holding Computers Portfolio Puters or generate 7.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.37%
Values	Daily Returns

Exela Technologies Preferred  vs.  Computers Portfolio Puters

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Computers Portfolio

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Computers Portfolio Puters are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Computers Portfolio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Exela Technologies and Computers Portfolio

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

The idea behind Exela Technologies Preferred and Computers Portfolio Puters 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.