Correlation Between El Al and Ilex Medical
Can any of the company-specific risk be diversified away by investing in both El Al and Ilex Medical 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 Ilex Medical 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 Ilex Medical, you can compare the effects of market volatilities on El Al and Ilex Medical 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 Ilex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Ilex Medical.
Diversification Opportunities for El Al and Ilex Medical
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ELAL and Ilex is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Ilex Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilex Medical 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 Ilex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilex Medical has no effect on the direction of El Al i.e., El Al and Ilex Medical go up and down completely randomly.
Pair Corralation between El Al and Ilex Medical
Assuming the 90 days trading horizon El Al Israel is expected to generate 1.94 times more return on investment than Ilex Medical. However, El Al is 1.94 times more volatile than Ilex Medical. It trades about 0.12 of its potential returns per unit of risk. Ilex Medical is currently generating about 0.12 per unit of risk. If you would invest 33,300 in El Al Israel on September 4, 2024 and sell it today you would earn a total of 33,190 from holding El Al Israel or generate 99.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Al Israel vs. Ilex Medical
Performance |
| Timeline |
| El Al Israel |
| Ilex Medical |
El Al and Ilex Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Al and Ilex Medical
The main advantage of trading using opposite El Al and Ilex Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Ilex Medical 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 Ilex Medical will offset losses from the drop in Ilex Medical's long position.| El Al vs. EN Shoham Business | El Al vs. Accel Solutions Group | El Al vs. Mivtach Shamir | El Al vs. Rani Zim Shopping |
| Ilex Medical vs. Bezeq Israeli Telecommunication | Ilex Medical vs. El Al Israel | Ilex Medical vs. Bank Leumi Le Israel | Ilex Medical vs. Elbit Systems |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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