Correlation Between E L and Quorum Information

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

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

Diversification Opportunities for E L and Quorum Information

-0.89

Correlation Coefficient

E L  Quorum Information

Pay attention - limited upside

The 3 months correlation between ELF-PF and Quorum is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Quorum Information Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quorum Information and E L 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 E L Financial Corp are associated (or correlated) with Quorum Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quorum Information has no effect on the direction of E L i.e., E L and Quorum Information go up and down completely randomly.

Pair Corralation between E L and Quorum Information

Assuming the 90 days trading horizon E L Financial Corp is expected to generate 0.23 times more return on investment than Quorum Information. However, E L Financial Corp is 4.31 times less risky than Quorum Information. It trades about 0.32 of its potential returns per unit of risk. Quorum Information Technologies is currently generating about -0.18 per unit of risk. If you would invest  2,118  in E L Financial Corp on April 20, 2025 and sell it today you would earn a total of  217.00  from holding E L Financial Corp or generate 10.25% return on investment over 90 days.

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

E L Financial Corp  vs.  Quorum Information Technologie

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 25 (%) 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.

Quorum Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quorum Information Technologies 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.

Pair Trading with E L and Quorum Information

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

The idea behind E L Financial Corp and Quorum Information Technologies 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.