Correlation Between Dan Hotels and Elbit Imaging
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Elbit Imaging 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 Dan Hotels and Elbit Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Elbit Imaging, you can compare the effects of market volatilities on Dan Hotels and Elbit Imaging 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 Dan Hotels with a short position of Elbit Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Elbit Imaging.
Diversification Opportunities for Dan Hotels and Elbit Imaging
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dan and Elbit is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Elbit Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Imaging and Dan Hotels 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 Dan Hotels are associated (or correlated) with Elbit Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Imaging has no effect on the direction of Dan Hotels i.e., Dan Hotels and Elbit Imaging go up and down completely randomly.
Pair Corralation between Dan Hotels and Elbit Imaging
Assuming the 90 days trading horizon Dan Hotels is expected to generate 3.02 times less return on investment than Elbit Imaging. But when comparing it to its historical volatility, Dan Hotels is 1.5 times less risky than Elbit Imaging. It trades about 0.01 of its potential returns per unit of risk. Elbit Imaging is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 44,000 in Elbit Imaging on September 12, 2024 and sell it today you would earn a total of 6,000 from holding Elbit Imaging or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dan Hotels vs. Elbit Imaging
Performance |
| Timeline |
| Dan Hotels |
| Elbit Imaging |
Dan Hotels and Elbit Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dan Hotels and Elbit Imaging
The main advantage of trading using opposite Dan Hotels and Elbit Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Elbit Imaging 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 Imaging will offset losses from the drop in Elbit Imaging's long position.| Dan Hotels vs. Migdal Insurance | Dan Hotels vs. Clal Insurance Enterprises | Dan Hotels vs. Bank Leumi Le Israel | Dan Hotels vs. Israel Discount Bank |
| Elbit Imaging vs. One Software Technologies | Elbit Imaging vs. Analyst IMS Investment | Elbit Imaging vs. Inrom Construction Industries | Elbit Imaging vs. Rapac Communication Infrastructure |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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