Correlation Between Elbit Medical and B Communications
Can any of the company-specific risk be diversified away by investing in both Elbit Medical and B Communications 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 Medical and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Medical Technologies and B Communications, you can compare the effects of market volatilities on Elbit Medical and B Communications 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 Medical with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Medical and B Communications.
Diversification Opportunities for Elbit Medical and B Communications
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elbit and BCOM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Medical Technologies and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Elbit Medical 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 Medical Technologies are associated (or correlated) with B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of Elbit Medical i.e., Elbit Medical and B Communications go up and down completely randomly.
Pair Corralation between Elbit Medical and B Communications
Assuming the 90 days trading horizon Elbit Medical Technologies is expected to under-perform the B Communications. In addition to that, Elbit Medical is 1.79 times more volatile than B Communications. It trades about -0.58 of its total potential returns per unit of risk. B Communications is currently generating about 0.14 per unit of volatility. If you would invest 168,800 in B Communications on September 18, 2024 and sell it today you would earn a total of 8,100 from holding B Communications or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Elbit Medical Technologies vs. B Communications
Performance |
| Timeline |
| Elbit Medical Techno |
| B Communications |
Elbit Medical and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Medical and B Communications
The main advantage of trading using opposite Elbit Medical and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Medical position performs unexpectedly, B Communications 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 B Communications will offset losses from the drop in B Communications' long position.| Elbit Medical vs. Nice | Elbit Medical vs. The Gold Bond | Elbit Medical vs. Bank Leumi Le Israel | Elbit Medical vs. ICL Israel Chemicals |
| B Communications vs. Tower Semiconductor | B Communications vs. Israel Discount Bank | B Communications vs. Photomyne | B Communications vs. M Yochananof and |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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