Correlation Between Elbit Systems and MeguREIT Israel
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and MeguREIT Israel 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 MeguREIT Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and MeguREIT Israel, you can compare the effects of market volatilities on Elbit Systems and MeguREIT Israel 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 MeguREIT Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and MeguREIT Israel.
Diversification Opportunities for Elbit Systems and MeguREIT Israel
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elbit and MeguREIT is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and MeguREIT Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeguREIT Israel 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 MeguREIT Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeguREIT Israel has no effect on the direction of Elbit Systems i.e., Elbit Systems and MeguREIT Israel go up and down completely randomly.
Pair Corralation between Elbit Systems and MeguREIT Israel
Assuming the 90 days trading horizon Elbit Systems is expected to generate 8.68 times less return on investment than MeguREIT Israel. But when comparing it to its historical volatility, Elbit Systems is 2.02 times less risky than MeguREIT Israel. It trades about 0.09 of its potential returns per unit of risk. MeguREIT Israel is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 43,210 in MeguREIT Israel on September 1, 2024 and sell it today you would earn a total of 14,220 from holding MeguREIT Israel or generate 32.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Systems vs. MeguREIT Israel
Performance |
| Timeline |
| Elbit Systems |
| MeguREIT Israel |
Elbit Systems and MeguREIT Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and MeguREIT Israel
The main advantage of trading using opposite Elbit Systems and MeguREIT Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, MeguREIT Israel 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 MeguREIT Israel will offset losses from the drop in MeguREIT Israel's long position.| Elbit Systems vs. Arad | Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Airport City | Elbit Systems vs. Harel Insurance Investments |
| MeguREIT Israel vs. Nice | MeguREIT Israel vs. The Gold Bond | MeguREIT Israel vs. Bank Leumi Le Israel | MeguREIT Israel vs. ICL Israel Chemicals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |