Correlation Between Elbit Systems and Azrieli
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Azrieli 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 Systems and Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Azrieli Group, you can compare the effects of market volatilities on Elbit Systems and Azrieli 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 Systems with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Azrieli.
Diversification Opportunities for Elbit Systems and Azrieli
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elbit and Azrieli is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Elbit Systems 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 Systems are associated (or correlated) with Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Elbit Systems i.e., Elbit Systems and Azrieli go up and down completely randomly.
Pair Corralation between Elbit Systems and Azrieli
Assuming the 90 days trading horizon Elbit Systems is expected to generate 0.77 times more return on investment than Azrieli. However, Elbit Systems is 1.29 times less risky than Azrieli. It trades about 0.08 of its potential returns per unit of risk. Azrieli Group is currently generating about 0.06 per unit of risk. If you would invest 7,871,039 in Elbit Systems on August 25, 2024 and sell it today you would earn a total of 1,388,961 from holding Elbit Systems or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Systems vs. Azrieli Group
Performance |
| Timeline |
| Elbit Systems |
| Azrieli Group |
Elbit Systems and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Azrieli
The main advantage of trading using opposite Elbit Systems and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Azrieli 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 Azrieli will offset losses from the drop in Azrieli's long position.| Elbit Systems vs. Arad | Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Danel | Elbit Systems vs. Airport City |
| Azrieli vs. Israel Canada | Azrieli vs. Delek Group | Azrieli vs. Shikun Binui | Azrieli vs. Israel Discount Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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