Correlation Between Bird Construction and E L

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

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

Diversification Opportunities for Bird Construction and E L

0.68

Correlation Coefficient

Bird Construction  E L

Poor diversification

The 3 months correlation between Bird and ELF-PF is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bird Construction 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 Bird Construction 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 Bird Construction 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 Bird Construction i.e., Bird Construction and E L go up and down completely randomly.

Pair Corralation between Bird Construction and E L

Assuming the 90 days trading horizon Bird Construction is expected to generate 3.66 times more return on investment than E L. However, Bird Construction is 3.66 times more volatile than E L Financial Corp. It trades about 0.36 of its potential returns per unit of risk. E L Financial Corp is currently generating about 0.23 per unit of risk. If you would invest  2,047  in Bird Construction on April 23, 2025 and sell it today you would earn a total of  923.00  from holding Bird Construction or generate 45.09% return on investment over 90 days.

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

Bird Construction  vs.  E L Financial Corp

Bird Construction

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bird Construction are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bird Construction displayed solid returns over the last few months and may actually be approaching a breakup point.

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 weak 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 Bird Construction and E L

The main advantage of trading using opposite Bird Construction and E L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bird Construction 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 Bird Construction 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.