Correlation Between Corning Incorporated and Electrovaya Common

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

By analyzing existing cross correlation between Corning Incorporated and Electrovaya Common Shares, you can compare the effects of market volatilities on Corning Incorporated and Electrovaya Common 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 Corning Incorporated with a short position of Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and Electrovaya Common.

Diversification Opportunities for Corning Incorporated and Electrovaya Common

0.45

Correlation Coefficient

Corning Incorporated  Electrovaya Common

Very weak diversification

The 3 months correlation between Corning and Electrovaya is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and Electrovaya Common go up and down completely randomly.

Pair Corralation between Corning Incorporated and Electrovaya Common

Considering the 90-day investment horizon Corning Incorporated is expected to generate 0.28 times more return on investment than Electrovaya Common. However, Corning Incorporated is 3.58 times less risky than Electrovaya Common. It trades about -0.13 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about -0.17 per unit of risk. If you would invest  3,267  in Corning Incorporated on January 31, 2024 and sell it today you would lose (89.00) from holding Corning Incorporated or give up 2.72% of portfolio value over 90 days.

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

Corning Incorporated  vs.  Electrovaya Common Shares

Corning Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corning Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Corning Incorporated is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Electrovaya Common Shares

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Corning Incorporated and Electrovaya Common

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

The idea behind Corning Incorporated and Electrovaya Common Shares 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.