Correlation Between Elbit Medical and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Elbit Medical and Homebiogas 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 Homebiogas 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 Homebiogas, you can compare the effects of market volatilities on Elbit Medical and Homebiogas 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 Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Medical and Homebiogas.
Diversification Opportunities for Elbit Medical and Homebiogas
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elbit and Homebiogas is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Medical Technologies and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas 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 Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Elbit Medical i.e., Elbit Medical and Homebiogas go up and down completely randomly.
Pair Corralation between Elbit Medical and Homebiogas
Assuming the 90 days trading horizon Elbit Medical Technologies is expected to generate 2.21 times more return on investment than Homebiogas. However, Elbit Medical is 2.21 times more volatile than Homebiogas. It trades about -0.01 of its potential returns per unit of risk. Homebiogas is currently generating about -0.52 per unit of risk. If you would invest 2,290 in Elbit Medical Technologies on September 1, 2024 and sell it today you would lose (480.00) from holding Elbit Medical Technologies or give up 20.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Medical Technologies vs. Homebiogas
Performance |
| Timeline |
| Elbit Medical Techno |
| Homebiogas |
Elbit Medical and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Medical and Homebiogas
The main advantage of trading using opposite Elbit Medical and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Medical position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' 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 |
| Homebiogas vs. Migdal Insurance | Homebiogas vs. Clal Insurance Enterprises | Homebiogas vs. Veridis Environment | Homebiogas vs. ICL Israel Chemicals |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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