Correlation Between Electra Co and El Al
Can any of the company-specific risk be diversified away by investing in both Electra Co and El Al 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 El Al 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 El Al Israel, you can compare the effects of market volatilities on Electra Co and El Al 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 El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Co and El Al.
Diversification Opportunities for Electra Co and El Al
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Electra and ELAL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Electra Co Pr and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel 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 El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Electra Co i.e., Electra Co and El Al go up and down completely randomly.
Pair Corralation between Electra Co and El Al
Assuming the 90 days trading horizon Electra Co Pr is expected to generate 0.92 times more return on investment than El Al. However, Electra Co Pr is 1.08 times less risky than El Al. It trades about 0.32 of its potential returns per unit of risk. El Al Israel is currently generating about -0.08 per unit of risk. If you would invest 749,100 in Electra Co Pr on September 1, 2024 and sell it today you would earn a total of 175,300 from holding Electra Co Pr or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Co Pr vs. El Al Israel
Performance |
| Timeline |
| Electra Co Pr |
| El Al Israel |
Electra Co and El Al Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Co and El Al
The main advantage of trading using opposite Electra Co and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Co position performs unexpectedly, El Al 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 El Al will offset losses from the drop in El Al's long position.| Electra Co vs. El Al Israel | Electra Co vs. Magic Software Enterprises | Electra Co vs. Neto Malinda | Electra Co vs. Orbit Technologies |
| El Al vs. Arad | El Al vs. Alony Hetz Properties | El Al vs. Airport City | El Al vs. Harel Insurance Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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