Correlation Between Economic Investment and E L

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

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

Diversification Opportunities for Economic Investment and E L

0.12

Correlation Coefficient

Economic Investment  E L

Average diversification

The 3 months correlation between Economic and ELF is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust 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 Economic Investment 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 Economic Investment Trust 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 Economic Investment i.e., Economic Investment and E L go up and down completely randomly.

Pair Corralation between Economic Investment and E L

Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 54.36 times more return on investment than E L. However, Economic Investment is 54.36 times more volatile than E L Financial Corp. It trades about 0.12 of its potential returns per unit of risk. E L Financial Corp is currently generating about 0.17 per unit of risk. If you would invest  1,608  in Economic Investment Trust on April 21, 2025 and sell it today you would earn a total of  412.00  from holding Economic Investment Trust or generate 25.62% return on investment over 90 days.

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

Economic Investment Trust  vs.  E L Financial Corp

Economic Investment Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Economic Investment Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Economic Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

E L Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in E L Financial Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, E L displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Economic Investment and E L

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

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.