Correlation Between Eldav L and Electra Real
Can any of the company-specific risk be diversified away by investing in both Eldav L and Electra Real 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 Eldav L and Electra Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eldav L and Electra Real Estate, you can compare the effects of market volatilities on Eldav L and Electra Real 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 Eldav L with a short position of Electra Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldav L and Electra Real.
Diversification Opportunities for Eldav L and Electra Real
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eldav and Electra is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eldav L and Electra Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Real Estate and Eldav L 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 Eldav L are associated (or correlated) with Electra Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Real Estate has no effect on the direction of Eldav L i.e., Eldav L and Electra Real go up and down completely randomly.
Pair Corralation between Eldav L and Electra Real
Assuming the 90 days trading horizon Eldav L is expected to generate 2.82 times less return on investment than Electra Real. In addition to that, Eldav L is 1.31 times more volatile than Electra Real Estate. It trades about 0.09 of its total potential returns per unit of risk. Electra Real Estate is currently generating about 0.34 per unit of volatility. If you would invest 406,000 in Electra Real Estate on August 30, 2024 and sell it today you would earn a total of 51,500 from holding Electra Real Estate or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldav L vs. Electra Real Estate
Performance |
| Timeline |
| Eldav L |
| Electra Real Estate |
Eldav L and Electra Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldav L and Electra Real
The main advantage of trading using opposite Eldav L and Electra Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldav L position performs unexpectedly, Electra Real 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 Electra Real will offset losses from the drop in Electra Real's long position.| Eldav L vs. SR Accord | Eldav L vs. Rapac Communication Infrastructure | Eldav L vs. Nextcom | Eldav L vs. EN Shoham Business |
| Electra Real vs. Azrieli Group | Electra Real vs. Israel Discount Bank | Electra Real vs. Alony Hetz Properties | Electra Real vs. Shufersal |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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