Correlation Between Israel Discount and Elbit Systems
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Elbit Systems 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 Israel Discount and Elbit Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Elbit Systems, you can compare the effects of market volatilities on Israel Discount and Elbit Systems 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 Israel Discount with a short position of Elbit Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Elbit Systems.
Diversification Opportunities for Israel Discount and Elbit Systems
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Elbit is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Elbit Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elbit Systems and Israel Discount 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 Israel Discount Bank are associated (or correlated) with Elbit Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elbit Systems has no effect on the direction of Israel Discount i.e., Israel Discount and Elbit Systems go up and down completely randomly.
Pair Corralation between Israel Discount and Elbit Systems
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.44 times more return on investment than Elbit Systems. However, Israel Discount Bank is 2.29 times less risky than Elbit Systems. It trades about 0.78 of its potential returns per unit of risk. Elbit Systems is currently generating about 0.25 per unit of risk. If you would invest 214,800 in Israel Discount Bank on August 24, 2024 and sell it today you would earn a total of 24,600 from holding Israel Discount Bank or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Elbit Systems
Performance |
| Timeline |
| Israel Discount Bank |
| Elbit Systems |
Israel Discount and Elbit Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Elbit Systems
The main advantage of trading using opposite Israel Discount and Elbit Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Elbit Systems 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 Systems will offset losses from the drop in Elbit Systems' long position.| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
| Elbit Systems vs. Nice | Elbit Systems vs. Bank Leumi Le Israel | Elbit Systems vs. Teva Pharmaceutical Industries | Elbit Systems vs. Bank Hapoalim |
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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |