Correlation Between Elbit Systems and Matricelf
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and Matricelf 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 Matricelf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and Matricelf, you can compare the effects of market volatilities on Elbit Systems and Matricelf 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 Matricelf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and Matricelf.
Diversification Opportunities for Elbit Systems and Matricelf
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elbit and Matricelf is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and Matricelf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matricelf 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 Matricelf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matricelf has no effect on the direction of Elbit Systems i.e., Elbit Systems and Matricelf go up and down completely randomly.
Pair Corralation between Elbit Systems and Matricelf
Assuming the 90 days trading horizon Elbit Systems is expected to generate 1.3 times more return on investment than Matricelf. However, Elbit Systems is 1.3 times more volatile than Matricelf. It trades about 0.09 of its potential returns per unit of risk. Matricelf is currently generating about -0.05 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elbit Systems vs. Matricelf
Performance |
| Timeline |
| Elbit Systems |
| Matricelf |
Elbit Systems and Matricelf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and Matricelf
The main advantage of trading using opposite Elbit Systems and Matricelf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, Matricelf 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 Matricelf will offset losses from the drop in Matricelf's long position.| Elbit Systems vs. Arad | Elbit Systems vs. Alony Hetz Properties | Elbit Systems vs. Airport City | Elbit Systems vs. Harel Insurance Investments |
| Matricelf vs. Nice | Matricelf vs. The Gold Bond | Matricelf vs. Bank Leumi Le Israel | Matricelf 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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