Correlation Between Elbit Imaging and Endymed
Can any of the company-specific risk be diversified away by investing in both Elbit Imaging and Endymed 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 Elbit Imaging and Endymed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Imaging and Endymed, you can compare the effects of market volatilities on Elbit Imaging and Endymed 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 Elbit Imaging with a short position of Endymed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Imaging and Endymed.
Diversification Opportunities for Elbit Imaging and Endymed
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Elbit and Endymed is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging and Endymed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endymed and Elbit Imaging 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 Elbit Imaging are associated (or correlated) with Endymed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endymed has no effect on the direction of Elbit Imaging i.e., Elbit Imaging and Endymed go up and down completely randomly.
Pair Corralation between Elbit Imaging and Endymed
Assuming the 90 days trading horizon Elbit Imaging is expected to generate 0.63 times more return on investment than Endymed. However, Elbit Imaging is 1.59 times less risky than Endymed. It trades about 0.1 of its potential returns per unit of risk. Endymed is currently generating about 0.04 per unit of risk. If you would invest 38,900 in Elbit Imaging on August 25, 2024 and sell it today you would earn a total of 12,390 from holding Elbit Imaging or generate 31.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Imaging vs. Endymed
Performance |
| Timeline |
| Elbit Imaging |
| Endymed |
Elbit Imaging and Endymed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Imaging and Endymed
The main advantage of trading using opposite Elbit Imaging and Endymed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging position performs unexpectedly, Endymed 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 Endymed will offset losses from the drop in Endymed's long position.| Elbit Imaging vs. Millennium Food Tech LP | Elbit Imaging vs. Gamatronic Electronic Industries | Elbit Imaging vs. Batm Advanced Communications | Elbit Imaging vs. Israel China Biotechnology |
| Endymed vs. Netz Hotels | Endymed vs. Migdal Insurance | Endymed vs. Harel Insurance Investments | Endymed vs. Menora Miv Hld |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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