Correlation Between Elbit Systems and Electra
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Electra 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 Electra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Electra, you can compare the effects of market volatilities on Elbit Systems and Electra 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 Electra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Electra.
Diversification Opportunities for Elbit Systems and Electra
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elbit and Electra is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Electra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra 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 Electra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra has no effect on the direction of Elbit Systems i.e., Elbit Systems and Electra go up and down completely randomly.
Pair Corralation between Elbit Systems and Electra
Assuming the 90 days trading horizon Elbit Systems is expected to generate 2.16 times less return on investment than Electra. But when comparing it to its historical volatility, Elbit Systems is 1.06 times less risky than Electra. It trades about 0.24 of its potential returns per unit of risk. Electra is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 15,750,000 in Electra on August 29, 2024 and sell it today you would earn a total of 3,017,000 from holding Electra or generate 19.16% 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. Electra
Performance |
| Timeline |
| Elbit Systems |
| Electra |
Elbit Systems and Electra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Electra
The main advantage of trading using opposite Elbit Systems and Electra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Electra 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 Electra will offset losses from the drop in Electra's long position.| Elbit Systems vs. Nice | Elbit Systems vs. Bank Leumi Le Israel | Elbit Systems vs. Teva Pharmaceutical Industries | Elbit Systems vs. Bank Hapoalim |
| Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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