Correlation Between Elbit Medical and IDI Insurance
Can any of the company-specific risk be diversified away by investing in both Elbit Medical and IDI Insurance 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 IDI Insurance 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 IDI Insurance, you can compare the effects of market volatilities on Elbit Medical and IDI Insurance 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 IDI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Medical and IDI Insurance.
Diversification Opportunities for Elbit Medical and IDI Insurance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elbit and IDI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Medical Technologies and IDI Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI Insurance 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 IDI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI Insurance has no effect on the direction of Elbit Medical i.e., Elbit Medical and IDI Insurance go up and down completely randomly.
Pair Corralation between Elbit Medical and IDI Insurance
Assuming the 90 days trading horizon Elbit Medical is expected to generate 1.2 times less return on investment than IDI Insurance. In addition to that, Elbit Medical is 1.88 times more volatile than IDI Insurance. It trades about 0.09 of its total potential returns per unit of risk. IDI Insurance is currently generating about 0.2 per unit of volatility. If you would invest 1,196,000 in IDI Insurance on August 29, 2024 and sell it today you would earn a total of 134,000 from holding IDI Insurance or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Medical Technologies vs. IDI Insurance
Performance |
| Timeline |
| Elbit Medical Techno |
| IDI Insurance |
Elbit Medical and IDI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Medical and IDI Insurance
The main advantage of trading using opposite Elbit Medical and IDI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Medical position performs unexpectedly, IDI Insurance 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 IDI Insurance will offset losses from the drop in IDI Insurance'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 |
| IDI Insurance vs. Elbit Systems | IDI Insurance vs. Discount Investment Corp | IDI Insurance vs. Clal Insurance Enterprises | IDI Insurance vs. AudioCodes |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |