Correlation Between METTLER TOLEDO and ELNUSA

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

By analyzing existing cross correlation between METTLER TOLEDO INTL and ELNUSA, you can compare the effects of market volatilities on METTLER TOLEDO and ELNUSA 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 METTLER TOLEDO with a short position of ELNUSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and ELNUSA.

Diversification Opportunities for METTLER TOLEDO and ELNUSA

-0.56

Correlation Coefficient

METTLER TOLEDO  ELNUSA

Excellent diversification

The 3 months correlation between METTLER and ELNUSA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and ELNUSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELNUSA and METTLER TOLEDO 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 METTLER TOLEDO INTL are associated (or correlated) with ELNUSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELNUSA has no effect on the direction of METTLER TOLEDO i.e., METTLER TOLEDO and ELNUSA go up and down completely randomly.

Pair Corralation between METTLER TOLEDO and ELNUSA

Assuming the 90 days trading horizon METTLER TOLEDO INTL is expected to under-perform the ELNUSA. But the stock apears to be less risky and, when comparing its historical volatility, METTLER TOLEDO INTL is 1.26 times less risky than ELNUSA. The stock trades about -0.07 of its potential returns per unit of risk. The ELNUSA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1.95  in ELNUSA on February 12, 2024 and sell it today you would earn a total of  0.10  from holding ELNUSA or generate 5.13% return on investment over 90 days.

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

METTLER TOLEDO INTL  vs.  ELNUSA

METTLER TOLEDO INTL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in METTLER TOLEDO INTL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METTLER TOLEDO may actually be approaching a critical reversion point that can send shares even higher in June 2024.

ELNUSA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ELNUSA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, ELNUSA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with METTLER TOLEDO and ELNUSA

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

The idea behind METTLER TOLEDO INTL and ELNUSA 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.