Correlation Between Elbit Medical and Oron Group
Can any of the company-specific risk be diversified away by investing in both Elbit Medical and Oron Group 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 Oron Group 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 Oron Group Investments, you can compare the effects of market volatilities on Elbit Medical and Oron Group 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 Oron Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Medical and Oron Group.
Diversification Opportunities for Elbit Medical and Oron Group
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elbit and Oron is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Medical Technologies and Oron Group Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oron Group Investments 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 Oron Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oron Group Investments has no effect on the direction of Elbit Medical i.e., Elbit Medical and Oron Group go up and down completely randomly.
Pair Corralation between Elbit Medical and Oron Group
Assuming the 90 days trading horizon Elbit Medical Technologies is expected to under-perform the Oron Group. In addition to that, Elbit Medical is 1.74 times more volatile than Oron Group Investments. It trades about -0.58 of its total potential returns per unit of risk. Oron Group Investments is currently generating about 0.09 per unit of volatility. If you would invest 95,940 in Oron Group Investments on September 18, 2024 and sell it today you would earn a total of 2,960 from holding Oron Group Investments or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Elbit Medical Technologies vs. Oron Group Investments
Performance |
| Timeline |
| Elbit Medical Techno |
| Oron Group Investments |
Elbit Medical and Oron Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Medical and Oron Group
The main advantage of trading using opposite Elbit Medical and Oron Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Medical position performs unexpectedly, Oron Group 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 Oron Group will offset losses from the drop in Oron Group'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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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