Correlation Between Enlight Renewable and El Al
Can any of the company-specific risk be diversified away by investing in both Enlight Renewable and El Al 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 Enlight Renewable and El Al into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Renewable Energy and El Al Israel, you can compare the effects of market volatilities on Enlight Renewable and El Al 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 Enlight Renewable with a short position of El Al. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and El Al.
Diversification Opportunities for Enlight Renewable and El Al
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enlight and ELAL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel and Enlight Renewable 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 Enlight Renewable Energy are associated (or correlated) with El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and El Al go up and down completely randomly.
Pair Corralation between Enlight Renewable and El Al
Assuming the 90 days trading horizon Enlight Renewable Energy is expected to generate 0.5 times more return on investment than El Al. However, Enlight Renewable Energy is 2.0 times less risky than El Al. It trades about 0.04 of its potential returns per unit of risk. El Al Israel is currently generating about -0.07 per unit of risk. If you would invest 600,000 in Enlight Renewable Energy on August 31, 2024 and sell it today you would earn a total of 6,600 from holding Enlight Renewable Energy or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlight Renewable Energy vs. El Al Israel
Performance |
| Timeline |
| Enlight Renewable Energy |
| El Al Israel |
Enlight Renewable and El Al Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Renewable and El Al
The main advantage of trading using opposite Enlight Renewable and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable position performs unexpectedly, El Al 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 El Al will offset losses from the drop in El Al's long position.| Enlight Renewable vs. Energix Renewable Energies | Enlight Renewable vs. Doral Group Renewable | Enlight Renewable vs. Elbit Systems | Enlight Renewable vs. Electreon Wireless |
| El Al vs. Delek Group | El Al vs. Teva Pharmaceutical Industries | El Al vs. Fattal 1998 Holdings | El Al vs. Bank Leumi Le Israel |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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