Correlation Between Elron Electronic and Partner
Can any of the company-specific risk be diversified away by investing in both Elron Electronic and Partner 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 Partner 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 Partner, you can compare the effects of market volatilities on Elron Electronic and Partner 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 Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elron Electronic and Partner.
Diversification Opportunities for Elron Electronic and Partner
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elron and Partner is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elron Electronic Industries and Partner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partner 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 Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partner has no effect on the direction of Elron Electronic i.e., Elron Electronic and Partner go up and down completely randomly.
Pair Corralation between Elron Electronic and Partner
Assuming the 90 days trading horizon Elron Electronic Industries is expected to generate 1.47 times more return on investment than Partner. However, Elron Electronic is 1.47 times more volatile than Partner. It trades about 0.3 of its potential returns per unit of risk. Partner is currently generating about 0.43 per unit of risk. If you would invest 34,010 in Elron Electronic Industries on August 28, 2024 and sell it today you would earn a total of 10,890 from holding Elron Electronic Industries or generate 32.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elron Electronic Industries vs. Partner
Performance |
| Timeline |
| Elron Electronic Ind |
| Partner |
Elron Electronic and Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elron Electronic and Partner
The main advantage of trading using opposite Elron Electronic and Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elron Electronic position performs unexpectedly, Partner 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 Partner will offset losses from the drop in Partner's long position.| Elron Electronic vs. Bank Hapoalim | Elron Electronic vs. Israel Discount Bank | Elron Electronic vs. Bezeq Israeli Telecommunication | Elron Electronic vs. Elbit Systems |
| Partner vs. Cellcom Israel | Partner vs. Bezeq Israeli Telecommunication | Partner vs. Bank Hapoalim | Partner 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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