Correlation Between General Commercial and Elton International

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

By analyzing existing cross correlation between General Commercial Industrial and Elton International Trading, you can compare the effects of market volatilities on General Commercial and Elton International 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 General Commercial with a short position of Elton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Commercial and Elton International.

Diversification Opportunities for General Commercial and Elton International

0.66

Correlation Coefficient

General Commercial  Elton International

Poor diversification

The 3 months correlation between General and Elton is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding General Commercial Industrial and Elton International Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elton International and General Commercial 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 General Commercial Industrial are associated (or correlated) with Elton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elton International has no effect on the direction of General Commercial i.e., General Commercial and Elton International go up and down completely randomly.

Pair Corralation between General Commercial and Elton International

Assuming the 90 days trading horizon General Commercial Industrial is expected to generate 1.32 times more return on investment than Elton International. However, General Commercial is 1.32 times more volatile than Elton International Trading. It trades about 0.21 of its potential returns per unit of risk. Elton International Trading is currently generating about 0.11 per unit of risk. If you would invest  136.00  in General Commercial Industrial on April 23, 2025 and sell it today you would earn a total of  37.00  from holding General Commercial Industrial or generate 27.21% return on investment over 90 days.

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

General Commercial Industrial  vs.  Elton International Trading

General Commercial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Commercial Industrial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, General Commercial sustained solid returns over the last few months and may actually be approaching a breakup point.

Elton International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elton International Trading are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Elton International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with General Commercial and Elton International

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

The idea behind General Commercial Industrial and Elton International Trading 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.