Correlation Between E For and Brooker

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

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

Diversification Opportunities for E For and Brooker

0.73

Correlation Coefficient

E For  Brooker

Poor diversification

The 3 months correlation between EFORL and Brooker is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding E for L and The Brooker Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooker Group and E For 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 for L are associated (or correlated) with Brooker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooker Group has no effect on the direction of E For i.e., E For and Brooker go up and down completely randomly.

Pair Corralation between E For and Brooker

If you would invest  50.00  in The Brooker Group on March 5, 2024 and sell it today you would earn a total of  7.00  from holding The Brooker Group or generate 14.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

E for L  vs.  The Brooker Group

E for L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E for L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Brooker Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Brooker Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Brooker is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with E For and Brooker

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

The idea behind E for L and The Brooker Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.