Correlation Between IDEXX Laboratories and EJF Investments
Can any of the company-specific risk be diversified away by investing in both IDEXX Laboratories and EJF Investments 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 IDEXX Laboratories and EJF Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDEXX Laboratories and EJF Investments, you can compare the effects of market volatilities on IDEXX Laboratories and EJF Investments 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 IDEXX Laboratories with a short position of EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDEXX Laboratories and EJF Investments.
Diversification Opportunities for IDEXX Laboratories and EJF Investments
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDEXX and EJF is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding IDEXX Laboratories and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments and IDEXX Laboratories 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 IDEXX Laboratories are associated (or correlated) with EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of IDEXX Laboratories i.e., IDEXX Laboratories and EJF Investments go up and down completely randomly.
Pair Corralation between IDEXX Laboratories and EJF Investments
Assuming the 90 days trading horizon IDEXX Laboratories is expected to generate 3.95 times more return on investment than EJF Investments. However, IDEXX Laboratories is 3.95 times more volatile than EJF Investments. It trades about 0.07 of its potential returns per unit of risk. EJF Investments is currently generating about 0.09 per unit of risk. If you would invest 65,360 in IDEXX Laboratories on September 7, 2025 and sell it today you would earn a total of 6,241 from holding IDEXX Laboratories or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IDEXX Laboratories vs. EJF Investments
Performance |
| Timeline |
| IDEXX Laboratories |
| EJF Investments |
IDEXX Laboratories and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDEXX Laboratories and EJF Investments
The main advantage of trading using opposite IDEXX Laboratories and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDEXX Laboratories position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| IDEXX Laboratories vs. Verizon Communications | IDEXX Laboratories vs. Universal Music Group | IDEXX Laboratories vs. Metlen Energy Metals | IDEXX Laboratories vs. Software Circle plc |
| EJF Investments vs. Endeavour Mining Corp | EJF Investments vs. Beowulf Mining | EJF Investments vs. JD Sports Fashion | EJF Investments vs. Blackrock World Mining |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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