Correlation Between El Al and Allot Communications
Can any of the company-specific risk be diversified away by investing in both El Al and Allot Communications 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 El Al and Allot Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Al Israel and Allot Communications, you can compare the effects of market volatilities on El Al and Allot Communications 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 El Al with a short position of Allot Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Allot Communications.
Diversification Opportunities for El Al and Allot Communications
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ELAL and Allot is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Allot Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allot Communications and El Al 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 El Al Israel are associated (or correlated) with Allot Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allot Communications has no effect on the direction of El Al i.e., El Al and Allot Communications go up and down completely randomly.
Pair Corralation between El Al and Allot Communications
Assuming the 90 days trading horizon El Al Israel is expected to under-perform the Allot Communications. But the stock apears to be less risky and, when comparing its historical volatility, El Al Israel is 1.41 times less risky than Allot Communications. The stock trades about -0.08 of its potential returns per unit of risk. The Allot Communications is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 126,400 in Allot Communications on September 1, 2024 and sell it today you would earn a total of 34,000 from holding Allot Communications or generate 26.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Al Israel vs. Allot Communications
Performance |
| Timeline |
| El Al Israel |
| Allot Communications |
El Al and Allot Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Al and Allot Communications
The main advantage of trading using opposite El Al and Allot Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Allot Communications 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 Allot Communications will offset losses from the drop in Allot Communications' long position.| El Al vs. Arad | El Al vs. Alony Hetz Properties | El Al vs. Airport City | El Al vs. Harel Insurance Investments |
| Allot Communications vs. Tower Semiconductor | Allot Communications vs. Nova | Allot Communications vs. Nice | Allot Communications 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |