Correlation Between El Al and Qualitau
Can any of the company-specific risk be diversified away by investing in both El Al and Qualitau 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 Qualitau 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 Qualitau, you can compare the effects of market volatilities on El Al and Qualitau 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 Qualitau. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Al and Qualitau.
Diversification Opportunities for El Al and Qualitau
Poor diversification
The 3 months correlation between ELAL and Qualitau is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding El Al Israel and Qualitau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualitau 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 Qualitau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualitau has no effect on the direction of El Al i.e., El Al and Qualitau go up and down completely randomly.
Pair Corralation between El Al and Qualitau
Assuming the 90 days trading horizon El Al is expected to generate 1.97 times less return on investment than Qualitau. In addition to that, El Al is 1.21 times more volatile than Qualitau. It trades about 0.07 of its total potential returns per unit of risk. Qualitau is currently generating about 0.16 per unit of volatility. If you would invest 471,031 in Qualitau on September 4, 2024 and sell it today you would earn a total of 1,258,969 from holding Qualitau or generate 267.28% 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. Qualitau
Performance |
| Timeline |
| El Al Israel |
| Qualitau |
El Al and Qualitau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with El Al and Qualitau
The main advantage of trading using opposite El Al and Qualitau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Al position performs unexpectedly, Qualitau 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 Qualitau will offset losses from the drop in Qualitau'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 |
| Qualitau vs. Palram | Qualitau vs. Shagrir Group Vehicle | Qualitau vs. EN Shoham Business | Qualitau vs. Lapidoth |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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