Correlation Between Direct Finance and Export Inv

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

By analyzing existing cross correlation between Direct Finance TA and Export Inv, you can compare the effects of market volatilities on Direct Finance and Export Inv 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 Direct Finance with a short position of Export Inv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Finance and Export Inv.

Diversification Opportunities for Direct Finance and Export Inv

0.0

Correlation Coefficient

Direct Finance  Export Inv

Pay attention - limited upside

The 3 months correlation between Direct and Export is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direct Finance TA and Export Inv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Export Inv and Direct Finance 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 Direct Finance TA are associated (or correlated) with Export Inv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Export Inv has no effect on the direction of Direct Finance i.e., Direct Finance and Export Inv go up and down completely randomly.

Pair Corralation between Direct Finance and Export Inv

If you would invest  5,088,621  in Direct Finance TA on August 26, 2025 and sell it today you would earn a total of  811,379  from holding Direct Finance TA or generate 15.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.0%
Values	Daily Returns

Direct Finance TA  vs.  Export Inv

Direct Finance TA

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Direct Finance TA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Direct Finance sustained solid returns over the last few months and may actually be approaching a breakup point.

Export Inv

Risk-Adjusted Performance

Weakest

Over the last 90 days Export Inv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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 Direct Finance and Export Inv

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

The idea behind Direct Finance TA and Export Inv 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.