Correlation Between Electra Co and Danel
Can any of the company-specific risk be diversified away by investing in both Electra Co and Danel 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 Electra Co and Danel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Co Pr and Danel, you can compare the effects of market volatilities on Electra Co and Danel 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 Electra Co with a short position of Danel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Co and Danel.
Diversification Opportunities for Electra Co and Danel
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electra and Danel is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Electra Co Pr and Danel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danel and Electra Co 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 Electra Co Pr are associated (or correlated) with Danel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danel has no effect on the direction of Electra Co i.e., Electra Co and Danel go up and down completely randomly.
Pair Corralation between Electra Co and Danel
Assuming the 90 days trading horizon Electra Co Pr is expected to generate 1.92 times more return on investment than Danel. However, Electra Co is 1.92 times more volatile than Danel. It trades about 0.3 of its potential returns per unit of risk. Danel is currently generating about 0.36 per unit of risk. If you would invest 728,000 in Electra Co Pr on August 29, 2024 and sell it today you would earn a total of 222,000 from holding Electra Co Pr or generate 30.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Electra Co Pr vs. Danel
Performance |
Timeline |
Electra Co Pr |
Danel |
Electra Co and Danel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electra Co and Danel
The main advantage of trading using opposite Electra Co and Danel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Co position performs unexpectedly, Danel 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 Danel will offset losses from the drop in Danel's long position.Electra Co vs. Clal Insurance Enterprises | Electra Co vs. Israel Discount Bank | Electra Co vs. Bezeq Israeli Telecommunication | Electra Co vs. Alony Hetz Properties |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Money Managers Screen money managers from public funds and ETFs managed around the world |