Correlation Between Elbit Systems and Bet Shemesh
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Bet Shemesh 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 Bet Shemesh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Bet Shemesh Engines, you can compare the effects of market volatilities on Elbit Systems and Bet Shemesh 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 Bet Shemesh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Bet Shemesh.
Diversification Opportunities for Elbit Systems and Bet Shemesh
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elbit and Bet is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Bet Shemesh Engines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bet Shemesh Engines 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 Bet Shemesh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bet Shemesh Engines has no effect on the direction of Elbit Systems i.e., Elbit Systems and Bet Shemesh go up and down completely randomly.
Pair Corralation between Elbit Systems and Bet Shemesh
Assuming the 90 days trading horizon Elbit Systems is expected to generate 0.49 times more return on investment than Bet Shemesh. However, Elbit Systems is 2.03 times less risky than Bet Shemesh. It trades about 0.09 of its potential returns per unit of risk. Bet Shemesh Engines is currently generating about -0.03 per unit of risk. If you would invest 8,551,000 in Elbit Systems on September 1, 2024 and sell it today you would earn a total of 269,000 from holding Elbit Systems or generate 3.15% 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. Bet Shemesh Engines
Performance |
| Timeline |
| Elbit Systems |
| Bet Shemesh Engines |
Elbit Systems and Bet Shemesh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Bet Shemesh
The main advantage of trading using opposite Elbit Systems and Bet Shemesh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Bet Shemesh 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 Bet Shemesh will offset losses from the drop in Bet Shemesh's long position.| Elbit Systems vs. Arad | Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Airport City | Elbit Systems vs. Harel Insurance Investments |
| Bet Shemesh vs. Arad | Bet Shemesh vs. Alony Hetz Properties | Bet Shemesh vs. Airport City | Bet Shemesh vs. Harel Insurance Investments |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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