Correlation Between El Al and Galileo Tech
Can any of the company-specific risk be diversified away by investing in both El Al and Galileo Tech 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 Galileo Tech 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 Galileo Tech, you can compare the effects of market volatilities on El Al and Galileo Tech 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 Galileo Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Galileo Tech.
Diversification Opportunities for El Al and Galileo Tech
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ELAL and Galileo is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Galileo Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galileo Tech 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 Galileo Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galileo Tech has no effect on the direction of El Al i.e., El Al and Galileo Tech go up and down completely randomly.
Pair Corralation between El Al and Galileo Tech
Assuming the 90 days trading horizon El Al Israel is expected to generate 0.57 times more return on investment than Galileo Tech. However, El Al Israel is 1.77 times less risky than Galileo Tech. It trades about 0.08 of its potential returns per unit of risk. Galileo Tech is currently generating about -0.03 per unit of risk. If you would invest 48,400 in El Al Israel on September 1, 2024 and sell it today you would earn a total of 18,600 from holding El Al Israel or generate 38.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Al Israel vs. Galileo Tech
Performance |
| Timeline |
| El Al Israel |
| Galileo Tech |
El Al and Galileo Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Al and Galileo Tech
The main advantage of trading using opposite El Al and Galileo Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Galileo Tech 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 Galileo Tech will offset losses from the drop in Galileo Tech's long position.| El Al vs. Arad | El Al vs. Alony Hetz Properties | El Al vs. Airport City | El Al vs. Harel Insurance Investments |
| Galileo Tech vs. Nextgen | Galileo Tech vs. Gencell | Galileo Tech vs. Bonus Biogroup | Galileo Tech vs. Intelicanna |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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