Correlation Between Wool Industry and Elastron

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

By analyzing existing cross correlation between Wool Industry Tria and Elastron SA , you can compare the effects of market volatilities on Wool Industry and Elastron 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 Wool Industry with a short position of Elastron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wool Industry and Elastron.

Diversification Opportunities for Wool Industry and Elastron

0.74

Correlation Coefficient

Wool Industry  Elastron

Poor diversification

The 3 months correlation between Wool and Elastron is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wool Industry Tria and Elastron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elastron SA and Wool Industry 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 Wool Industry Tria are associated (or correlated) with Elastron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elastron SA has no effect on the direction of Wool Industry i.e., Wool Industry and Elastron go up and down completely randomly.

Pair Corralation between Wool Industry and Elastron

Assuming the 90 days trading horizon Wool Industry Tria is expected to generate 2.81 times more return on investment than Elastron. However, Wool Industry is 2.81 times more volatile than Elastron SA . It trades about 0.15 of its potential returns per unit of risk. Elastron SA is currently generating about 0.12 per unit of risk. If you would invest  500.00  in Wool Industry Tria on April 23, 2025 and sell it today you would earn a total of  265.00  from holding Wool Industry Tria or generate 53.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Wool Industry Tria  vs.  Elastron SA

Wool Industry Tria

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wool Industry Tria are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Wool Industry unveiled solid returns over the last few months and may actually be approaching a breakup point.

Elastron SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elastron SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Elastron sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wool Industry and Elastron

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

The idea behind Wool Industry Tria and Elastron SA 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.