Correlation Between Electra and Strauss
Can any of the company-specific risk be diversified away by investing in both Electra and Strauss 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 Electra and Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra and Strauss Group, you can compare the effects of market volatilities on Electra and Strauss 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 Electra with a short position of Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra and Strauss.
Diversification Opportunities for Electra and Strauss
Almost no diversification
The 3 months correlation between Electra and Strauss is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Electra and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group and Electra 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 Electra are associated (or correlated) with Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of Electra i.e., Electra and Strauss go up and down completely randomly.
Pair Corralation between Electra and Strauss
Assuming the 90 days trading horizon Electra is expected to generate 1.3 times more return on investment than Strauss. However, Electra is 1.3 times more volatile than Strauss Group. It trades about 0.04 of its potential returns per unit of risk. Strauss Group is currently generating about -0.03 per unit of risk. If you would invest 16,065,800 in Electra on August 31, 2024 and sell it today you would earn a total of 3,277,200 from holding Electra or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra vs. Strauss Group
Performance |
| Timeline |
| Electra |
| Strauss Group |
Electra and Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra and Strauss
The main advantage of trading using opposite Electra and Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra position performs unexpectedly, Strauss 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 Strauss will offset losses from the drop in Strauss' long position.| Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra vs. Israel Discount Bank |
| Strauss vs. Shufersal | Strauss vs. Israel Discount Bank | Strauss vs. Bank Leumi Le Israel | Strauss vs. Azrieli Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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