Correlation Between El Al and Netanel
Can any of the company-specific risk be diversified away by investing in both El Al and Netanel 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 Netanel 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 Netanel Group, you can compare the effects of market volatilities on El Al and Netanel 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 Netanel. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Netanel.
Diversification Opportunities for El Al and Netanel
Poor diversification
The 3 months correlation between ELAL and Netanel is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Netanel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netanel Group 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 Netanel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netanel Group has no effect on the direction of El Al i.e., El Al and Netanel go up and down completely randomly.
Pair Corralation between El Al and Netanel
Assuming the 90 days trading horizon El Al Israel is expected to generate 1.34 times more return on investment than Netanel. However, El Al is 1.34 times more volatile than Netanel Group. It trades about 0.51 of its potential returns per unit of risk. Netanel Group is currently generating about -0.07 per unit of risk. If you would invest 89,000 in El Al Israel on November 29, 2024 and sell it today you would earn a total of 21,400 from holding El Al Israel or generate 24.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Al Israel vs. Netanel Group
Performance |
| Timeline |
| El Al Israel |
| Netanel Group |
El Al and Netanel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Al and Netanel
The main advantage of trading using opposite El Al and Netanel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Netanel 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 Netanel will offset losses from the drop in Netanel's long position.| El Al vs. Delek Group | El Al vs. Teva Pharmaceutical Industries | El Al vs. Fattal 1998 Holdings | El Al vs. Bank Leumi Le Israel |
| Netanel vs. EN Shoham Business | Netanel vs. Rani Zim Shopping | Netanel vs. Accel Solutions Group | Netanel vs. Mivtach Shamir |
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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