Correlation Between Arbor Metals and E L

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

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

Diversification Opportunities for Arbor Metals and E L

-0.65

Correlation Coefficient

Arbor Metals  E L

Excellent diversification

The 3 months correlation between Arbor and ELF-PF is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and E L Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E L Financial and Arbor Metals 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 Arbor Metals Corp 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 Arbor Metals i.e., Arbor Metals and E L go up and down completely randomly.

Pair Corralation between Arbor Metals and E L

Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the E L. In addition to that, Arbor Metals is 7.15 times more volatile than E L Financial Corp. It trades about -0.08 of its total potential returns per unit of risk. E L Financial Corp is currently generating about 0.23 per unit of volatility. If you would invest  2,168  in E L Financial Corp on April 24, 2025 and sell it today you would earn a total of  151.00  from holding E L Financial Corp or generate 6.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Arbor Metals Corp  vs.  E L Financial Corp

Arbor Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arbor Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

E L Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, E L may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Arbor Metals and E L

The main advantage of trading using opposite Arbor Metals and E L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals 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.

The idea behind Arbor Metals Corp and E L Financial Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.