Correlation Between Timbercreek Financial and E L

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

By analyzing existing cross correlation between Timbercreek Financial Corp and E L Financial 3, you can compare the effects of market volatilities on Timbercreek Financial 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 Timbercreek Financial with a short position of E L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timbercreek Financial and E L.

Diversification Opportunities for Timbercreek Financial and E L

0.97

Correlation Coefficient

Timbercreek Financial  E L

Almost no diversification

The 3 months correlation between Timbercreek and ELF-PH is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Timbercreek Financial Corp and E L Financial 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E L Financial and Timbercreek Financial 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 Timbercreek Financial 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 Timbercreek Financial i.e., Timbercreek Financial and E L go up and down completely randomly.

Pair Corralation between Timbercreek Financial and E L

Assuming the 90 days horizon Timbercreek Financial Corp is expected to generate 1.82 times more return on investment than E L. However, Timbercreek Financial is 1.82 times more volatile than E L Financial 3. It trades about 0.31 of its potential returns per unit of risk. E L Financial 3 is currently generating about 0.24 per unit of risk. If you would invest  678.00  in Timbercreek Financial Corp on April 25, 2025 and sell it today you would earn a total of  103.00  from holding Timbercreek Financial Corp or generate 15.19% return on investment over 90 days.

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

Timbercreek Financial Corp  vs.  E L Financial 3

Timbercreek Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timbercreek Financial Corp are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Timbercreek Financial 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 3 are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, E L is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Timbercreek Financial and E L

The main advantage of trading using opposite Timbercreek Financial and E L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timbercreek Financial 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 Timbercreek Financial Corp and E L Financial 3 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.