Correlation Between Elron Electronic and Epitomee Medical
Can any of the company-specific risk be diversified away by investing in both Elron Electronic and Epitomee 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 Elron Electronic and Epitomee Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elron Electronic Industries and Epitomee Medical, you can compare the effects of market volatilities on Elron Electronic and Epitomee 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 Elron Electronic with a short position of Epitomee Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elron Electronic and Epitomee Medical.
Diversification Opportunities for Elron Electronic and Epitomee Medical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elron and Epitomee is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elron Electronic Industries and Epitomee Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epitomee Medical and Elron Electronic 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 Elron Electronic Industries are associated (or correlated) with Epitomee Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epitomee Medical has no effect on the direction of Elron Electronic i.e., Elron Electronic and Epitomee Medical go up and down completely randomly.
Pair Corralation between Elron Electronic and Epitomee Medical
Assuming the 90 days trading horizon Elron Electronic is expected to generate 15.44 times less return on investment than Epitomee Medical. But when comparing it to its historical volatility, Elron Electronic Industries is 6.81 times less risky than Epitomee Medical. It trades about 0.05 of its potential returns per unit of risk. Epitomee Medical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 28,510 in Epitomee Medical on November 4, 2024 and sell it today you would earn a total of 64,300 from holding Epitomee Medical or generate 225.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elron Electronic Industries vs. Epitomee Medical
Performance |
| Timeline |
| Elron Electronic Ind |
| Epitomee Medical |
Elron Electronic and Epitomee Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elron Electronic and Epitomee Medical
The main advantage of trading using opposite Elron Electronic and Epitomee Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elron Electronic position performs unexpectedly, Epitomee 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 Epitomee Medical will offset losses from the drop in Epitomee Medical's long position.| Elron Electronic vs. Elbit Systems | Elron Electronic vs. Discount Investment Corp | Elron Electronic vs. Clal Insurance Enterprises | Elron Electronic vs. AudioCodes |
| Epitomee Medical vs. Mobile Max M | Epitomee Medical vs. Batm Advanced Communications | Epitomee Medical vs. Clal Insurance Enterprises | Epitomee Medical vs. First International Bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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