Correlation Between Eltek and Super Micro
Can any of the company-specific risk be diversified away by investing in both Eltek and Super Micro 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 Eltek and Super Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eltek and Super Micro Computer, you can compare the effects of market volatilities on Eltek and Super Micro 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 Eltek with a short position of Super Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eltek and Super Micro.
Diversification Opportunities for Eltek and Super Micro
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eltek and Super is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and Super Micro Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Micro Computer and Eltek 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 Eltek are associated (or correlated) with Super Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Micro Computer has no effect on the direction of Eltek i.e., Eltek and Super Micro go up and down completely randomly.
Pair Corralation between Eltek and Super Micro
Given the investment horizon of 90 days Eltek is expected to under-perform the Super Micro. But the stock apears to be less risky and, when comparing its historical volatility, Eltek is 2.09 times less risky than Super Micro. The stock trades about -0.15 of its potential returns per unit of risk. The Super Micro Computer is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,386 in Super Micro Computer on December 23, 2024 and sell it today you would earn a total of 829.00 from holding Super Micro Computer or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eltek vs. Super Micro Computer
Performance |
| Timeline |
| Eltek |
| Super Micro Computer |
Eltek and Super Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eltek and Super Micro
The main advantage of trading using opposite Eltek and Super Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eltek position performs unexpectedly, Super Micro 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 Super Micro will offset losses from the drop in Super Micro's long position.| Eltek vs. Methode Electronics | Eltek vs. OSI Systems | Eltek vs. Bel Fuse A | Eltek vs. Richardson Electronics |
| Super Micro vs. D Wave Quantum | Super Micro vs. Rigetti Computing | Super Micro vs. Cricut Inc | Super Micro vs. Quantum Computing |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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