Correlation Between Elbit Medical and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Elbit Medical and Clal Biotechnology 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 Clal Biotechnology 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 Clal Biotechnology Industries, you can compare the effects of market volatilities on Elbit Medical and Clal Biotechnology 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 Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Medical and Clal Biotechnology.
Diversification Opportunities for Elbit Medical and Clal Biotechnology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elbit and Clal is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Medical Technologies and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology 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 Clal Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Biotechnology has no effect on the direction of Elbit Medical i.e., Elbit Medical and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Elbit Medical and Clal Biotechnology
Assuming the 90 days trading horizon Elbit Medical Technologies is expected to generate 1.29 times more return on investment than Clal Biotechnology. However, Elbit Medical is 1.29 times more volatile than Clal Biotechnology Industries. It trades about 0.09 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.02 per unit of risk. If you would invest 1,840 in Elbit Medical Technologies on August 30, 2024 and sell it today you would earn a total of 140.00 from holding Elbit Medical Technologies or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.67% |
| Values | Daily Returns |
Elbit Medical Technologies vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Elbit Medical Techno |
| Clal Biotechnology |
Elbit Medical and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Medical and Clal Biotechnology
The main advantage of trading using opposite Elbit Medical and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Medical position performs unexpectedly, Clal Biotechnology 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 Clal Biotechnology will offset losses from the drop in Clal Biotechnology's 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 |
| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. Bezeq Israeli Telecommunication | Clal Biotechnology vs. B Communications | Clal Biotechnology vs. Petrochemical |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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