Correlation Between Discount Investment and Elron Electronic
Can any of the company-specific risk be diversified away by investing in both Discount Investment and Elron Electronic 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 Discount Investment and Elron Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discount Investment Corp and Elron Electronic Industries, you can compare the effects of market volatilities on Discount Investment and Elron Electronic 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 Discount Investment with a short position of Elron Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and Elron Electronic.
Diversification Opportunities for Discount Investment and Elron Electronic
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Discount and Elron is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and Elron Electronic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elron Electronic Ind and Discount Investment 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 Discount Investment Corp are associated (or correlated) with Elron Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elron Electronic Ind has no effect on the direction of Discount Investment i.e., Discount Investment and Elron Electronic go up and down completely randomly.
Pair Corralation between Discount Investment and Elron Electronic
Assuming the 90 days trading horizon Discount Investment Corp is expected to under-perform the Elron Electronic. In addition to that, Discount Investment is 1.82 times more volatile than Elron Electronic Industries. It trades about -0.12 of its total potential returns per unit of risk. Elron Electronic Industries is currently generating about 0.2 per unit of volatility. If you would invest 44,550 in Elron Electronic Industries on November 3, 2024 and sell it today you would earn a total of 2,040 from holding Elron Electronic Industries or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discount Investment Corp vs. Elron Electronic Industries
Performance |
| Timeline |
| Discount Investment Corp |
| Elron Electronic Ind |
Discount Investment and Elron Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and Elron Electronic
The main advantage of trading using opposite Discount Investment and Elron Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment position performs unexpectedly, Elron Electronic 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 Elron Electronic will offset losses from the drop in Elron Electronic's long position.| Discount Investment vs. Clal Insurance Enterprises | Discount Investment vs. Israel Discount Bank | Discount Investment vs. Migdal Insurance | Discount Investment vs. Bezeq Israeli Telecommunication |
| Elron Electronic vs. Elbit Systems | Elron Electronic vs. Discount Investment Corp | Elron Electronic vs. Clal Insurance Enterprises | Elron Electronic vs. AudioCodes |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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