Correlation Between Azrieli and Elbit Medical
Can any of the company-specific risk be diversified away by investing in both Azrieli and Elbit Medical 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 Azrieli and Elbit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azrieli Group and Elbit Medical Technologies, you can compare the effects of market volatilities on Azrieli and Elbit Medical 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 Azrieli with a short position of Elbit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Elbit Medical.
Diversification Opportunities for Azrieli and Elbit Medical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Azrieli and Elbit is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and Elbit Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Medical Techno and Azrieli 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 Azrieli Group are associated (or correlated) with Elbit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Medical Techno has no effect on the direction of Azrieli i.e., Azrieli and Elbit Medical go up and down completely randomly.
Pair Corralation between Azrieli and Elbit Medical
Assuming the 90 days trading horizon Azrieli Group is expected to generate 0.42 times more return on investment than Elbit Medical. However, Azrieli Group is 2.4 times less risky than Elbit Medical. It trades about 0.25 of its potential returns per unit of risk. Elbit Medical Technologies is currently generating about -0.14 per unit of risk. If you would invest 2,708,000 in Azrieli Group on August 30, 2024 and sell it today you would earn a total of 208,000 from holding Azrieli Group or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Azrieli Group vs. Elbit Medical Technologies
Performance |
| Timeline |
| Azrieli Group |
| Elbit Medical Techno |
Azrieli and Elbit Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azrieli and Elbit Medical
The main advantage of trading using opposite Azrieli and Elbit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli position performs unexpectedly, Elbit Medical 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 Elbit Medical will offset losses from the drop in Elbit Medical's long position.| Azrieli vs. Melisron | Azrieli vs. Bank Leumi Le Israel | Azrieli vs. Bank Hapoalim | Azrieli vs. Amot Investments |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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