Correlation Between Elbit Systems and PCB Tec
Can any of the company-specific risk be diversified away by investing in both Elbit Systems and PCB Tec 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 PCB Tec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elbit Systems and PCB Tec, you can compare the effects of market volatilities on Elbit Systems and PCB Tec 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 PCB Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Systems and PCB Tec.
Diversification Opportunities for Elbit Systems and PCB Tec
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Elbit and PCB is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Systems and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec 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 PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of Elbit Systems i.e., Elbit Systems and PCB Tec go up and down completely randomly.
Pair Corralation between Elbit Systems and PCB Tec
Assuming the 90 days trading horizon Elbit Systems is expected to generate 0.43 times more return on investment than PCB Tec. However, Elbit Systems is 2.34 times less risky than PCB Tec. It trades about 0.25 of its potential returns per unit of risk. PCB Tec is currently generating about 0.03 per unit of risk. If you would invest 8,556,000 in Elbit Systems on August 24, 2024 and sell it today you would earn a total of 704,000 from holding Elbit Systems or generate 8.23% 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. PCB Tec
Performance |
| Timeline |
| Elbit Systems |
| PCB Tec |
Elbit Systems and PCB Tec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elbit Systems and PCB Tec
The main advantage of trading using opposite Elbit Systems and PCB Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Systems position performs unexpectedly, PCB Tec 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 PCB Tec will offset losses from the drop in PCB Tec'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 |
| PCB Tec vs. Automatic Bank Services | PCB Tec vs. EN Shoham Business | PCB Tec vs. Rapac Communication Infrastructure | PCB Tec vs. Tadiran Hldg |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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